lock in period for housing/office rental

[tew-ts]

Hi all,
I am newbie in this forum, I am from Singapore, I am an chinese and basically our comapny are going to set up an office in Bangalore, been searching around so far realized that the rental is much expensive than Singapore, therefore, I need have your good advice on below few things,

1) Security deposit - Agent told me landlord is asked for 10-12months which i think is unreasonable, 2-3months is fair but not 10months, but may i know is it a norm in Bangalore?

2) Lock-in Period, For office rental, they are asking for 3years lock-in periond which I also think is unreasonable, but again, may I know is it a norm in Bangalore?

3) Monthly rental increment - even we sign a 3year lock-in, monthly rental will still increase year by year, from 5% onwards, again and again, whether this is norm? I felt unsecure and landlord and simple ask 10-15% or more since there is no black and white...

4) Cost of rental - According to my agent, per sqft for city/CBD (fully furnished/move-in condition) is about Rs70~Rs120, such as office nearby Railway station, cost is about Rs70 (Fully furnished not inclusive maintenence fee), is it reasonable? I am really confused.

5) Tax of 10.3% - Is it a applicable for all the housing rental and property rental??

6) Housing (condo) - New building/fully furnished/inclusive of gym,small market,swimming pool and etc, rental cost is about Rs85,000/month, it seems too high for me as rental compare to SIngapore is still higher...is it norm??

Well, I am not offend anyone but I really need something for comparision, so I only can compared with Singapore. I really need some information...

Appreciated if you can let me know some idea...

With Regards

[RaviK]

Security deposit - Agent told me landlord is asked for 10-12months

Tht's how property owners and mostly brokers/agents take ppl for a ride. Negotiate for a total deposit of 2-3 months. Most realestate brokers are too cunning in Bangalore. Try to see online classifids from original owners.

Lock-in Period, For office rental, they are asking for 3years lock-in periond

Not sure. I don't think there are any norms. What does the owner say when you deny to this proposal?

monthly rental will still increase year by year, from 5% onwards

Upto you. No such rules ar ethere. If you think you can pay, accept it. Else ask for better options.

4) Cost of rental - According to my agent, per sqft for city/CBD (fully furnished/move-in condition) is about Rs70~Rs120, such as office nearby Railway station, cost is about Rs70 (Fully furnished not inclusive maintenence fee), is it reasonable?

May be someone else can give better idea. Have you tried contacting multiple owners directly?

5) Tax of 10.3% - Is it a applicable for all the housing rental and property rental??

Never heard of Atleast not for housing rentals.

rental cost is about Rs85,000/month

Compare with other places in Bangalore.

Overall, some efforts and time would be required to find a proper place. Else you get caught by fraud property-brokers and greedy,uneducated landlords.

[IB]

I am from US and have a small company in Bangalore here and can answer some questions if is some help to you. Contact me at 98451 46067

[Arion003]

On the security deposit, please see the article on the homepage of this site re how to avoid paying 10 months' deposit. It was the norm in Bangalore but is slowly changing. Refer to the article for more clarity.

There is no norm for a lock-in, a lock-in is as long or short as you negotiate it and the same for rent escalation.

The service tax on property rental, which he is probably quoting, is a matter pending litigation before the Supreme Court of India. As far as I am aware the Delhi High Court had stayed the applicability of service tax to leases i.e., at present no service tax applies to leases. However, you may want to check this up with a local real estate lawyer as to the exact status of this case.

The rent quoted for the housing rental depends on where you are staying. In my experience a 3 bedroom apartment of about 1700 sq ft in a premium locality with pool, gym and the works does not cost anywhere in excess of 25-30 thousand.

Instead of getting duped by brokers I would recommend you do a market survey by looking at sites like 99acres.com, magicbricks.com and indiaproperty.com to determine what the correct market rate for property in Bangalore is. You may even get in touch with owners directly through this medium.

Also check out the real estate section on this site which advertises various properties.

Hope this helps.