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Commercial Rent Agreement

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What is commercial lease agreement?

Lease Deed or Rental Agreement pertains to the contract of leasing and renting of a property for commercial purpose such as for corporate office, shops, office space or industrial space that produces income between the parties wherein a tenant agrees to pay a fixed amount of rent to the owner every month.

Importance of lease agreement for commercial space

Commercial lease are generally executed for long time period which various from 3 to 5 years generally but may extend further, so it is important to lay down the important terms and conditions before renting a space for commercial purpose.

Important ingredients of a well-written lease agreement

  • Parties to the agreement: The details of Lessor and lessee, stating their name and address.
  • Date of execution of commercial lease deed.
  • Property description.
  • Renewal time that is after what duration or period the deed is required to be renewed, if any.
  • Any encumbrance details, if any.
  • Consideration to be paid, at what time it shall be paid, any increment applicable to it after the specified period of time.
  • Duties or liabilities of the parties: Any other liability to be incurred by the lessee during his /her stay in the rented premise such as taxes, cess, and such other municipal taxes if any.
  • Whether the tenant can sublet the commercial space to a new tenant or not.
  • Terms and conditions: Clear instructions regarding restriction if any from the lessor side, say regarding subletting, selling, purchasing, assigning, which is required to be obliged by the lessee such other condition say keeping the building constructed on the demised premises in good and tenantable condition.
  • Duration: The duration for which the deed is to be executed that is the start and end or the renewal as the case may be, it could be expressed or implied or can also be in perpetuity.
  • Deposition of other expenditure, if any: A lump sum amount apart from the periodically amount taken, is demanded by the owner called as a deposit, which is of returnable nature at the time of the end of the lease deed and could be subject to certain deductions in case of any violation to the terms of the deed. However, everything must be pre-informed and consent is to be taken in writing. Usually, this particular thing is taken care in the lease deed itself.

What are the services Lawyerinc offers for Lease agreement for commercial space?

Our services:

Our comprehensive range of end-to-end solutions includes following:

  • End to end services for commercial lease deed drafting as well as its registration.
  • We have expertise in getting commercial lease deed.
  • We will get in touch with you through renounced lawyers in this field.
  • Our Experts shall guide you through the procedure and supply you with a detailed checklist of the required documents.
  • We shall verify the documents you provide
  • An application will be made by us and duly submitted.
  • Free consultation for any enquiry that you may have about lease deed.
  • You will get your commercial lease deed done without any hassles.

*Any fee, stamp duty and miscellaneous charges shall be payable extra.

Do contact us in case of any query related commercial lease deed and much more. To avail any of the above-stated services, kindly establish contact by posting a query at our site.

Various stages for lease deed execution for commercial property

  • Primary Stage:Once the Lease deed is formulated the duration of the lease, consideration, mode of payment should be clearly discussed and negotiated.
  • Documentation Stage:The Memorandum of Understanding (MOU) shall be formulated with regard to the commercial aspects, duties and other related obligations of the respective parties. Basically, the intention of the parties is taken to the next stage of the process.
  • Basic Due Diligence Stage:The draft should be properly read by the lessee and in case of any confusion, it should be clarified then and there, and the property details should be checked and verified such as title clearance, property paper.
  • Drafting, Notarization, registration Stage: Once theRequisite money deposit, consideration amount is paid off take the possession of the property. The deed should be signed and dated by lessor and lessee and by the witnesses to the execution of the Lease Deed. Once the instrument has been executed it should be notarized on the stamp paper and can be put up for registration at the Office of the applicable Sub-Registrar of Assurances having suitable jurisdiction over the property.
  • Post Registration Stage:After the possession has been taking n over by the Lessee, the lessee must inform about the same to various governmental and semi-governmental bodies having jurisdiction over the concerned property in writing about the change of holder.

Legal aspect of lease deed registration for commercial property

Lease deed registration process and other procedure for commercial property is quite similar to residential property sale deed as Consumer laws are also applicable to commercial property. Similarly as per Section 107 of the transfer of property Act, 1882 and pursuant to of section 19(1)(d) of the Transfer of Property Act, 1882 and Section 19 (1) (d) of the India Registration Act, 1908 respectively it is mandatory to register the lease deed of an immovable property for a lease term exceeding one year or in such as a system of yearly payment of rent, such as Agricultural land etc. where lease deed is not registered such deed shall be treated as null and void.

Difference between lease agreement for Commercial property and Residential property

  • Commercial lease agreement is signed for long duration generally for 3 to 5 years even long but Residential lease deed is signed for period of 11 months generally.
  • In commercial lease deed tenants are allowed to make minor structural changes in property as per their need and requirement but in case of residential deed tenants are not allowed to make any kind of changes.
  • In case of commercial lease deed, clauses can be altered as per need of tenant but in residential deed standard formats are complied.
  • Legal terms and conditions may vary or differs from residential one.
  • Renewal rate of rent in commercial deed is high in comparison to residential deed.

Frequently Asked Questions

  • 1. Are oral/verbal tenancy agreement are legal?

    Yes, verbal tenancy agreement are legal but are not recommended as that is difficult to enforce as there is no proof of anything. So that might create an issue in the future.

  • 2. If tenant has caused damage to the property can landlord ask him to vacate the property before term in case of commercial deed?

    No, owner cannot ask tenant to vacate property unless major damaged has been incurred to the property and tenant is ready to get it repaired.

  • 3. Can tenant in commercial property can vacate property before end of tenancy?

    No, if tenant wants to vacate property before expiry of lease term then he needs to compensate owner for any damages incurred.

  • 4. Why to get commercial lease agreement through lawyerinc?

    Lawyerinc is a complete blend of professionals from across the globe. In –house team of lawyers and attorneys, CA, CS. All professional work together in Lawyerinc, providing you end to end solution. It guarantees delivery in the shortest and most reasonable rate in India. It enjoys a global presence.

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