Choosing between corporate and personal lease

Published:April 19, 2014 12:16 am

By: Om Ahuja

The most important advantage that a corporate lease offers over a personal lease is the vastly enhanced safety factor. The possibility of fraudulent activity of any kind in a corporate lease is minimal, since the company in whose name the property is leased assumes complete responsibility for the occupant. The rent comes in on time, and the owner of the property stands a very high chance of getting another occupant from the same company immediately on the expiry of the lease period.

A corporate lease arrangement makes sense for property owners who value the comfort and high security level of tenants whose financial soundness is vouchsafed to the highest possible degree. They are also ideal for owners who seek the sustained cash flow assured by long-term leases, since corporate leases are generally signed for durations of either 24 or 36 months.

The primary difference between leasing out a property to a corporate rather than to an individual lies in the fact that a corporate lease equals assured and hassle-free rental income flows. This is by no means a given in the case of a personal lease arrangement. Secondly, there is considerable scope for negotiation, since most landlords are willing to be flexible when it comes to landing a company lease.

The process of leasing out a property to a corporate is same as in a personal lease. The agreement must be signed and registered in court, and once the advance rent and security deposit are paid by the company, the designated occupant takes possession of the property.

While discussing a corporate lease arrangement with a company, the property owner should ensure that he can negotiate for a minimum lock-in period. Also, while the company would expect to be allowed to designate another employee as occupant if the current tenant is transferred, this should not happen without the written consent of the owner.

Company lease and personal lease agreements are almost identical, with the main difference being that in a company lease agreement, it is not necessary to mention the name of the occupant. Instead, the company’s name will appear as the lessee. With regards to the collection of monthly dues, the usual arrangement in a corporate lease is that the rent is transferred into the landlord’s account by the 7th of every month.

— The author is CEO – Residential Services, JLL India

‘Single-window clearance necessary for housing sector’

Global property consultant Cushman & Wakefield in a report has recommended a single-window clearance for housing projects to tackle rapid urbanisation. “Execution of projects is one of India’s main weakness; it truly fuels the culture of slower implementation. India must move towards a single window clearance so that 18-24 months are not spent on getting permissions,” Cushman & Wakefield and PHD Chamber said in a joint report. The consultant said that “political will, action and implementation” were key factors to handle urbanisation. Urban India would have 600 million people by 2031, an increase of 59 per cent from 2011, according to the report ‘Challenges and Opportunities for Housing Sector in Urban India’. Besides single window clearance, the firm listed out several measures to tackle rapid urbanisation including innovative use of land, adequate funding, doing away with Rent Control Act, promotion of rental housing, incentives on affordable housing, credit access to people falling in EWS/LIG categories.

IndiaHomes raises Rs150 crore through private equity

Property broking portal IndiaHomes has raised Rs 150 crore from US-based venture capital firm New Enterprise Associates (NEA) and two existing investors. IndiaHomes, which started operations in 2009, is present in Delhi, Gurgaon, Noida, Mumbai, Bangalore and Kolkata, is planning to expand its presence to other major cities This is the second round of private equity fund raising by the company. It had earlier raised Rs 120 crore from Helion Venture Capital and Foundation Capital. “We have decided to expand our operations to 50 major towns in India. We have raised Rs 150 crore private equity led by NEA. Our existing partners Helion Venture and Foundation Capital have also invested,” IndiaHomes Founder and Managing Director Samarjit Singh said. IndiaHomes offers a complete turnkey of services to its customers in both the primary as well as secondary real estate market. It also help customer in getting bank loans apart from purchase, sale and rental of residential properties. The entire range of service is offered free of cost to the customer. PTI

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