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Can lessor (or) lesse terminate the lease before completion of the lease period For ex :- Mr. A given to Mr. b , a commercial house property for lease for a period of 3 years . Mr. B , the lesse , terminates the lease agreement by changing their business to another building without paying lease rental to the lessor in the middle of the lease period, say 2nd year. Then what will happen? Is it possible? If possible, what are the consequences? What if lesse told the lessor that he'll terminate before a prescribed period, is there a prescribed period for this case ?
Answers (5)
In general, lease agreements specify the rights and obligations of both the lessor (property owner) and the lessee (tenant). The terms of the lease agreement will determine whether the lessee has the right to terminate the lease before the completion of the lease period and the consequences of such termination. There is a non-cancellable period in which the lessee or lessor cannot terminate the lease. If they terminate the lease in this period penalty would be payable. Say the lease contract is for 3 years period. Non-cancellable period is 2 years. If the lessee terminates before 2 years, rent for the balance period has to be paid. For accounting purpose, we consider only the non-cancellable period.
CA Suraj Lakhotia Admin
Responded at other query which you had posted.
Sorry sir, it's my fault, unintentionally posted on two fields. 😅😅👍 Okay anyhow, my doubt got clarified, thank you sir😃.
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