The contract entered by the parties, always has some binding conditions which determines its enforceability i.e. rights and duties of parties, how compensation is awarded to the party in case of default by one of the parties, time and date of the contract, place where the contract needed to take place, place where the compensation can be claimed, arbitration clause and where the contract comes to an end etc.

But perpetuity contracts includes no specified time period and does not outline as to when this contract should be terminated.

A perpetual lease is an agreement where the land is allotted to a person over state land in accordance with the provision laid down under the Urban Land Ceiling & Regulation Act,1976. A person who is holding the property is responsible for the terms and conditions laid down under the deed,  failing which amounts its termination from the land. Perpetual leases are always issued for some defining purpose laid down under the Urban Land (Ceiling & Regulation ) Act 1976. It is basically issued for the agricultural or commercial purpose. The perpetual lease can also be issued for some other purposes required the sign of other authorities and also the person taking perpetual lease disclosed the purpose he wants to issue for.

Perpetual leases are issued for a specific purpose (e.g. agricultural or commercial). The lease must only be used for the purpose for which it was originally issued. The issue of a lease does not automatically imply it can be used for the purpose issued (i.e. other authorities’ approval may be required).

The form also includes the following details

  • Land area, details of the area required for the Lease
  • Commencement of the work .i.e date on which the land shall be taken
  • Payment details
  • Covenants
  • Termination of Lease
  • Rights of both the parties

A perpetual lease deed or a deed of lease for a term in perpetuity, is essentially a lease deed in which no specified time period as to when such lease deed should be terminated is mentioned.

Whether an agreement/contract is in perpetuity or not, depends upon the conditions mentioned in such agreement/deed/contract. If any clause mentions when the agreement is terminated, it may not be a lease deed for a term in perpetuity. All important clauses stating the terms, conditions and promises between the parties must be included in a lease deed (for a term in perpetuity).

A perpetual lease deed is an ongoing tenure – mostly over government/state land. A landholder of such a perpetual lease is obligated to comply with the terms and conditions of such a perpetual lease deed, failing which the immovable property may be revoked.

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