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INCREASE IN LEASE RENT EVERY 10 YEARS

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INCREASE IN LEASE RENT EVERY 10 YEARS

Last updated: April 15 2012
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  • INCREASE IN LEASE RENT EVERY 10 YEARS

    Friends,
    Attached is the snap shot from the Registered lease deed for LB.
    One of the clauses say the following statement which I am not able to comprehend.



    The lease rent shall be enhanced by 50% after every 10 years i.e; 1.5 times of the prevailing premium lease rent.

    I guess, the clauses for all lands alloted by NOIDA Authority to various builder shall be same with LITTLE or NO difference. So following question is valid for all lands.

    Does this clause mean that buyer has to shell out extra money every TEN years apart from the current lease rent being charged by builder.
    Attached Files
    Last edited May 29 2011, 05:37 PM.
  • #2

    #2

    Re : INCREASE IN LEASE RENT EVERY 10 YEARS

    yes NA can increase lease rent in every 10 years but normally lease rent paid at once for90 years i.e you can pay one time lease rent ( total lease rent equalent to 10 years value) then you are out of this increase.We did same in our society also.

    Comment

    • #3

      #3

      Re : INCREASE IN LEASE RENT EVERY 10 YEARS

      Originally posted by dhanam View Post
      yes NA can increase lease rent in every 10 years but normally lease rent paid at once for90 years i.e you can pay one time lease rent ( total lease rent equalent to 10 years value) then you are out of this increase.We did same in our society also.
      But the builders are paying over a period of 8-10 years. So let's assume, they pay to NA as scheduled by NA. So till the end of 10 years from allotment of the plot, 100% amount along with interest is paid to NA. What after that?

      Still the lease rent shall have to be paid by buyer every ten years?
      I am really not able to understand this.

      PS: Attached is the schedule of payment for LB as agreed between NA & 3C.
      Attached Files

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      • #4

        #4

        Re : INCREASE IN LEASE RENT EVERY 10 YEARS

        I think the same lease deed has another provision for paying one time lease rent for entire 90 years (capital value 10 or 11 year"s lease rent).

        Most builders prefer to pay one time lease rent and accordingly charge/ collect from flat buyers. I guess the Rs. 90/95/100 lease rent we are paying to the builder is one time lease rent and there will be no further demand on this account in future.

        Comment

        • #5

          #5

          Re : INCREASE IN LEASE RENT EVERY 10 YEARS

          My comprehension for this is follows :

          252 crores is the lease rent for ten years for LB land.
          3C paid 1% (2.52 crores) during allotment and over next 8 years till Dec-2016, they shall pay the rest amount along with the interest component.

          After 10 years, i.e; in the year 2018 (original allotment in Dec-2008), LB residents shall have to pay again the lease rent.

          PS: I guess same shall be applicable to all lands alloted to builders across NOIDA region and buyers in each of this project shall have to pay additional lease rent. (Hence builder are not mentioning the lease rent as ONE TIME)

          Comment

          • #6

            #6

            Re : INCREASE IN LEASE RENT EVERY 10 YEARS

            Originally posted by SMJ2011 View Post
            I think the same lease deed has another provision for paying one time lease rent for entire 90 years (capital value 10 or 11 year"s lease rent).

            Most builders prefer to pay one time lease rent and accordingly charge/ collect from flat buyers. I guess the Rs. 90/95/100 lease rent we are paying to the builder is one time lease rent and there will be no further demand on this account in future.
            all builders (may be few exceptions) are paying over a period of 8-10 years not 100% payment in one go.

            Comment

            • #7

              #7

              Re : INCREASE IN LEASE RENT EVERY 10 YEARS

              LChand Ji....you are confusing between land premium and lease rent.

              Land premium which is land cost, is being paid in installments over 8-10 years time with interest.

              Lease Rent is annual recurring payment independent of land premium and the same is to be paid annually during entire tenure of lease (90 years) even after the land premium has been fully paid.

              Authority has a scheme of one time payment of lease rent.

              Comment

              • #8

                #8

                Re : INCREASE IN LEASE RENT EVERY 10 YEARS

                Originally posted by SMJ2011 View Post
                LChand Ji....you are confusing between land premium and lease rent.

                Land premium which is land cost, is being paid in installments over 8-10 years time with interest.

                Lease Rent is annual recurring payment independent of land premium and the same is to be paid annually during entire tenure of lease (90 years) even after the land premium has been fully paid.

                Authority has a scheme of one time payment of lease rent.
                are you sure Land Premium & Lease Rent are different?
                I don't think..these are different. Here the land is not being sold but rented on lease. So there is nothing like LAND Premium ...if it is..its the synonym to Lease Rent.
                Forgive my ignorance but I am able to comprehend this way only.

                Anyone has clarity over this issue, please enlighten the poor janta like me.

                Comment

                • #9

                  #9

                  Re : INCREASE IN LEASE RENT EVERY 10 YEARS

                  Originally posted by LChand View Post
                  are you sure Land Premium & Lease Rent are different?
                  I don't think..these are different. Here the land is not being sold but rented on lease. So there is nothing like LAND Premium ...if it is..its the synonym to Lease Rent.
                  Forgive my ignorance but I am able to comprehend this way only.

                  Anyone has clarity over this issue, please enlighten the poor janta like me.

                  Yes, I am dead sure...Please read your lease agreement again and you will understand this.

                  Every piece of land in India attracts annual rent, be it a freehold or a leasehold.

                  When a land is allotted on lease hold basis, instead of calling it "land cost", it is called as "land premium".

                  Seen this across many states.

                  Comment

                  • #10

                    #10

                    Re : INCREASE IN LEASE RENT EVERY 10 YEARS

                    Originally posted by SMJ2011 View Post
                    Yes, I am dead sure...Please read your lease agreement again and you will understand this.

                    Every piece of land in India attracts annual rent, be it a freehold or a leasehold.

                    When a land is allotted on lease hold basis, instead of calling it "land cost", it is called as "land premium".

                    Seen this across many states.
                    any more views, same or differing?

                    Comment

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