New Delhi, May 22 (PTI) Rental agreements and contracts between the two parties will continue to prevail during the lockdown period, according to law experts. Addressing the webinar on 'Assessing the Impact of COVID-19 on Rental Contracts' organised by FICCI in association with Indian Council of Arbitration (ICA), Justice Arjan Kumar Sikri, Former Judge of Supreme Court, said the 'real estate rental agreements and contracts will continue to prevail during the current COVID-19 scenario'.
The force majeure will continue to be applicable as mentioned in the contract, he was quoted as saying in a statement issued by the FICCI. Sikri said the real estate rental agreements and contracts are between two parties and the government cannot enforce any notification.
Sanjay Dutt, joint chairman, FICCI Real Estate Committee and Managing Director and CEO, Tata Realty and Infrastructure Ltd, raised pertinent queries on the importance of rental agreement and force majeure in an agreement. He said global office markets like Tokyo and Hong Kong have waived rent, which stands at USD 600 per sq ft per annum for office space. In India, the top office markets stand at USD 15 per sq feet per annum.
Raj Menda, joint chairman, FICCI Real Estate Committee and Corporate Chairman of RMZ Corp said that commercial parks are operational, and they are working hard to function seamlessly. He added that his organisation has convinced its clients to pay the rent.
R K Sanghi, Advocate, said that to provide relief to both landlords and tenants, the government can look at coming out with a temporary law as being done by some of the countries today like the US and Singapore.
Sudip Mullick, Partner, Khaitan & Co, said the key is the agreement and the notifications of the government on deferment or non-payment of rent by tenants are primarily moral obligations and not legal obligations.
He added the contract between the landlord and tenant will prevail in COVID-19 situation. P V Kapur, Senior Advocate & Bar at Law, said the best solution in a situation like COVID-19 is that the landlord and tenant find a way out with mutual negotiations. He added that in case of triggering force majeure in an agreement, the party will have to give a notice. Vinod Rohira, managing director and chief executive officer - Commercial Real Estate and REITS, K Raheja Corp, said that 60 per cent of office space leasing in India is by Fortune 500 companies that are financially robust. PTI MJH MKJ