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Important Issues and Considerations For Sub-Lease
Important Issues and Considerations For Sub-Lease
Utmost importance lies in scrutinizing the original lease agreement between the
government and the current lessee.
1. Explicit permission for sub-leasing must be granted in the original lease. Absence
of this renders any potential sub-lease void. Then you'll need express permission
from the government authority that originally granted the lease. Renewal of Original
Lease period is important.
2. The Original lease may impose specific conditions for sub-leasing, such as
(a) government approval
(b) payment of fees
( c) limitations on how the land can be used
3. the termination clauses in the original lease and their potential impact on your
position if the lease is terminated early. Also, check the options for renewal of the
original lease.
4. Verify the land records to confirm that the lessee has a valid, registered lease
from the government and there are no encumbrances on the property.
5. Crucially, ensure that the current land use and Zoning regulations in Uttar Pradesh
permit the construction of warehouses on the proposed site.
6. Banks will be hesitant to offer loans on a subleased property, especially since it's
government land. If a loan is possible, the bank will likely require a sub-ordination
agreement where the original lessee (Lease Holder) and potentially the government
itself, agree to the bank's right to take possession in case of your default.
7. Uttar Pradesh (where Lucknow is located) may have additional regulations on land
use, urban development, and lease agreements.
(d) clauses Duration and renewal rights, Rent amount and escalation clauses,Your
rights and obligations as a sub-lessee and Dispute resolution mechanisms.