Property on Paagdi system
10 months ago
Query:
1) Can we hike rent for a tenant using a commercial place on a paagdi system?
2) Can tenant on a paagdi system change the name of shop, change the name board and renovate the interiors of the shop without taking consent from the landlord?
A.Dear client,
the simple answer is not straight forward. Generally, the landlord can increase the rent of his property. The landlord can easily increase the statutory rent each year by 4%. The rent will either remain the same or increase as discussed by the renter and the landlord. The agreed-upon hike in rent will be mentioned in the rent agreement.
Since pagdi is an old concept and not many rules and laws are defined for rental income, it is hard to say if by law you have the right or not. It is upon the discretion of your tenant and of course your rapport with him to come to a consensus about the same.
With reference to your second question ,if tenant has carried out any structural alterations without landlord consent or has failed to pay rentals eviction suit can be filed against tenant
the simple answer is not straight forward. Generally, the landlord can increase the rent of his property. The landlord can easily increase the statutory rent each year by 4%. The rent will either remain the same or increase as discussed by the renter and the landlord. The agreed-upon hike in rent will be mentioned in the rent agreement.
Since pagdi is an old concept and not many rules and laws are defined for rental income, it is hard to say if by law you have the right or not. It is upon the discretion of your tenant and of course your rapport with him to come to a consensus about the same.
With reference to your second question ,if tenant has carried out any structural alterations without landlord consent or has failed to pay rentals eviction suit can be filed against tenant
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A.Dear Sir,
RIGHTS OF PAGDI HOLDER
Q1. What is Pagdi system in Mumbai?
Ans. The Pagdi system is a pre-independence rental law that gives the tenant certain ownership rights over the rented property, including the right to sub-let the property or even sells it while giving a share to the original owner.
Q2. Is the Pagdi system legal in India now
Ans. While there are efforts to modernize or abolish the archaic Pagdi system altogether, the system was made legal as per the Maharashtra Rent Control Act of 1999 and came into effect in the year 2000.
Q3. What happens if my owner wants to sell the Pagdi property I’m renting?
Ans. If the original owners choose to sell the building with its land to a new real estate developer, you as a tenant will be given a substantial percentage of the current sale amount to vacate the premises.
Q4. Can I save on taxes on the sale of a Pagdi property I am renting?
Ans. The amount received from the sale of the Pagdi property is a capital asset and you can save tax on such long-term capital gains by reinvesting in a new home.
Q5. Can I get a home loan on a Pagdi property?
Ans. Getting a home loan on a property under the Pagdi System can be difficult, as many ownership issues remain prevalent with old properties. If you want the property rights transferred to your name, you need to establish your ownership rights for the banks to approve your loan application.
RIGHTS OF PAGDI HOLDER
Q1. What is Pagdi system in Mumbai?
Ans. The Pagdi system is a pre-independence rental law that gives the tenant certain ownership rights over the rented property, including the right to sub-let the property or even sells it while giving a share to the original owner.
Q2. Is the Pagdi system legal in India now
Ans. While there are efforts to modernize or abolish the archaic Pagdi system altogether, the system was made legal as per the Maharashtra Rent Control Act of 1999 and came into effect in the year 2000.
Q3. What happens if my owner wants to sell the Pagdi property I’m renting?
Ans. If the original owners choose to sell the building with its land to a new real estate developer, you as a tenant will be given a substantial percentage of the current sale amount to vacate the premises.
Q4. Can I save on taxes on the sale of a Pagdi property I am renting?
Ans. The amount received from the sale of the Pagdi property is a capital asset and you can save tax on such long-term capital gains by reinvesting in a new home.
Q5. Can I get a home loan on a Pagdi property?
Ans. Getting a home loan on a property under the Pagdi System can be difficult, as many ownership issues remain prevalent with old properties. If you want the property rights transferred to your name, you need to establish your ownership rights for the banks to approve your loan application.
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