Commercial Lease Agreement for India

Commercial Lease Agreement Template for India

A comprehensive legal document governed by Indian law that establishes the terms and conditions for leasing commercial property between a lessor (landlord) and lessee (tenant). This agreement is structured in accordance with the Transfer of Property Act, 1882, and various state-specific rent control laws, incorporating mandatory provisions for commercial tenancies in India. The document covers essential elements including rent terms, duration, maintenance responsibilities, permitted use, and compliance requirements, while addressing specific Indian legal requirements such as stamp duty and registration procedures.

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What is a Commercial Lease Agreement?

The Commercial Lease Agreement is a crucial legal instrument used in India when a property owner (lessor) agrees to let their commercial property to a business tenant (lessee) for commercial purposes. This document is essential for establishing clear terms and protecting both parties' interests in commercial property transactions. It must comply with various Indian legislations including the Transfer of Property Act, 1882, state-specific rent control laws, and the Registration Act, 1908. The agreement typically includes detailed provisions about rent, security deposit, maintenance, utilities, permitted use, and other operational aspects specific to commercial properties. It requires proper stamp duty payment and registration when the lease term exceeds 11 months, as per Indian law.

What sections should be included in a Commercial Lease Agreement?

1. Parties: Identification of the lessor/landlord and lessee/tenant with complete details including registration/incorporation information for companies

2. Background: Context of the lease agreement including brief property description and intent of parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Demise: Formal grant of lease and description of the leased premises

5. Term and Renewal: Duration of lease, commencement date, and renewal terms

6. Rent and Security Deposit: Rent amount, payment terms, security deposit details, and escalation provisions

7. Taxes and Outgoings: Responsibility for property taxes, GST, maintenance charges, and utilities

8. Use of Premises: Permitted use of the premises and restrictions

9. Maintenance and Repairs: Responsibilities of parties for maintenance, repairs, and renovations

10. Insurance: Insurance requirements for both parties

11. Assignment and Subletting: Restrictions and conditions for assignment or subletting

12. Landlord's Covenants: Obligations and warranties of the landlord

13. Tenant's Covenants: Obligations and warranties of the tenant

14. Termination: Grounds for termination and procedure

15. Force Majeure: Provisions for unforeseen circumstances

16. Dispute Resolution: Process for resolving disputes including jurisdiction

17. Notices: Method and addresses for serving notices

18. Governing Law: Applicable law and jurisdiction

19. Execution: Signature blocks and witness details

What sections are optional to include in a Commercial Lease Agreement?

1. Fit-out Period: Terms for initial renovation period, used when premises require tenant modifications

2. Lock-in Period: Minimum guaranteed period of tenancy, used in long-term commercial leases

3. Common Areas: Rights and regulations regarding common areas, used for multi-tenant buildings

4. Parking: Specific parking rights and regulations, used when parking is a significant feature

5. Signage Rights: Terms for external and internal signage, important for retail premises

6. Environmental Compliance: Special environmental obligations, used for industrial or specialized commercial use

7. Service Level Agreement: Detailed maintenance and service standards, used in premium commercial properties

8. Right of First Refusal: Terms for future sale or re-lease, used in strategic locations

9. Break Clause: Early termination options, used in long-term leases

What schedules should be included in a Commercial Lease Agreement?

1. Schedule 1 - Property Description: Detailed description of premises including floor plans and measurements

2. Schedule 2 - Rent Schedule: Detailed breakdown of rent, escalations, and payment schedule

3. Schedule 3 - Handover Condition: Inventory and condition of premises at handover

4. Schedule 4 - Building Rules: Detailed rules and regulations for the building/complex

5. Schedule 5 - Maintenance Responsibilities: Detailed split of maintenance responsibilities between parties

6. Schedule 6 - Approved Alterations: Pre-approved modifications or fit-out plans

7. Appendix A - Registration Requirements: Documentation required for lease registration

8. Appendix B - Insurance Requirements: Detailed insurance coverage requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Commercial Real Estate

Retail

Office Space

Industrial

Hospitality

Healthcare

Information Technology

Banking and Financial Services

Manufacturing

Logistics and Warehousing

Education

Professional Services

Relevant Teams

Legal

Finance

Operations

Facilities Management

Administration

Compliance

Real Estate

Risk Management

Procurement

Property Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Facilities Manager

Real Estate Manager

Property Manager

Legal Counsel

Operations Director

Business Development Manager

Administrative Manager

Finance Manager

Compliance Officer

Real Estate Director

Head of Operations

Company Secretary

Risk Manager

Procurement Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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