Commercial Renting in Kerala: The Ultimate Landlord’s FAQ (2026 Edition)

No. This is the biggest myth in Indian real estate. The Supreme Court has repeatedly clarified (e.g., in Brij Narayan Shukla vs. Sudesh Kumar) that tenancy is "permissive possession." As long as the tenant pays rent—even irregularly—and acknowledges you as the landlord, they cannot claim "Adverse Possession," even after 50 years.

• Lease: Creates an "interest" in the land. It is harder to terminate and often gives the tenant statutory protection under the Rent Control Act.
• Leave & License: Grants mere "permission" to use the premises without creating a tenancy interest.

For commercial landlords in Kerala, a carefully drafted Leave & License is often safer for short-term arrangements (11 months) to avoid long-term tenancy traps.

Yes, if the term exceeds 11 months. Under the Registration Act, an unregistered lease for a year or more is inadmissible in court.

Under the current Kerala Buildings (Lease and Rent Control) Act, 1965, No. When a lease expires, the tenant becomes a "Statutory Tenant." They have a right to continue unless you have a specific legal ground for eviction (like arrears of rent or bona fide need). This is why the "Termination Clause" in your agreement must be drafted strategically.

In private contracts, there is no statutory cap on the percentage. A standard clause in Kerala commercial markets is a 5% to 10% annual escalation. However, if you don't have a written agreement, the tenant can approach the court to fix a "Fair Rent," which might be lower than market expectations.

Yes. You are no longer stuck with frozen rents. In the landmark judgment Edger Ferus v. Abraham Ittycheria, the Kerala High Court ruled that landlords are entitled to "Fair Rent" based on current inflation and market value. You can file a petition in the Rent Control Court to revise the rent to current standards.

If your total rental income exceeds ₹20 Lakhs per year, GST at 18% is applicable on commercial rent.

• The Rule: The landlord collects this 18% from the tenant and deposits it with the government.
• The Trap: If your agreement doesn't say "Rent + GST," the tax department may treat the rent received as inclusive of GST, eating into your profit. Always specify: "Rent shall be ₹X plus applicable GST."

Market practice varies. For commercial properties, 6 to 10 months' rent is standard. Note: If the Model Tenancy Act is adopted in the future, this may be capped at 6 months. Currently, it is a matter of mutual contract.

• Landlord: Structural Repairs (Roof, pillars, external walls).
• Tenant: Minor/Day-to-day Repairs (Fuses, taps, internal painting).

Clarification: Your agreement must explicitly state who pays for "Annual Maintenance Charges" (AMC) of the building's lift and generator. Silence here leads to disputes.

The most common grounds under Section 11 of the Act are:

• Arrears of Rent: Tenant fails to pay despite a registered notice.
• Bona Fide Need: You (or your dependent) need the space to start a business.
• Subletting: Tenant rents it to someone else without your consent.
• Ceasure of Occupation: Tenant locks the shop and keeps it closed for 6+ months without cause.

Realistically, 3 to 5 years in the lower court, with potential appeals taking longer. Our Advice: Litigation is a last resort. We focus on "Pressure Strategy"—using legal notices, statutory compliance checks, and negotiation to recover possession faster than courts can.

No. The Kerala High Court has ruled that a tenant must continue depositing admitted arrears of rent during the case. If they stop, the court can order immediate eviction under Section 12 of the Act.

You can deduct the repair costs from the Security Deposit. However, "Normal Wear and Tear" (fading paint, minor scratches) cannot be deducted. Your agreement should clearly define what constitutes "Damage" vs. "Wear and Tear."

Yes. You can grant a Power of Attorney (POA) to a trusted relative or lawyer in Kerala to sign on your behalf. Alternatively, the agreement can be couriered to you, signed, and then adjudicated (stamped) in Kerala within 3 months of receipt.

Not yet. The Central Government approved it in 2021, but Kerala has not passed it into state law.

Why it matters: The current law favors tenants. The MTA favors contracts. We advise clients to include a "Migration Clause" in current leases, forcing tenants to sign a new MTA-compliant agreement once the law is adopted.

While not strictly mandatory under the Rent Act, many City Police Commissionerates (like Kochi and Kozhikode) now require landlords to submit tenant details for security clearance. It is a critical safety step that also psychologically deters tenants from illegal activities.

Strictly NO. Under Section 13 of the Act, a landlord cannot cut off "essential amenities" (water, electricity) without a court order. Doing so can lead to criminal penalties and weaken your eviction case.

Yes. Commercial tenancy in Kerala is heritable. The legal heirs inherit the tenancy rights. However, they must use the premises for the same business. If they change the business or keep it closed, you may have grounds for eviction.

A Triple Net Lease requires the tenant to pay Rent + Property Tax + Insurance + Maintenance. While common globally for banks/franchises, in Kerala, Property Tax is legally the owner's liability. However, you can contractually agree that the tenant reimburses you for these costs.

A "Stationery Shop Agreement" is legally weak. We draft "Techno-Legal" contracts that include:

• Automatic Rent Escalation Clauses.
• Specific "Permitted Use" Definitions (preventing business changes).
• Indemnity Clauses protecting you from the tenant's illegal acts.
• Jurisdiction Clauses to ensure disputes are handled in favorable courts.