Commercial lease agreement

Who uses it and when

The full template

Words in [BRACKETS] are blanks. Fill them in below or after you copy it — nothing you type is sent anywhere.

COMMERCIAL LEASE AGREEMENT

This Lease Agreement is made at [CITY] on [DATE OF SIGNING].

BETWEEN

[LESSOR NAME], [INDIVIDUAL, OR COMPANY / FIRM WITH REGISTRATION NUMBER], having its address at [LESSOR ADDRESS], PAN [LESSOR PAN], GSTIN [LESSOR GSTIN OR "NOT REGISTERED"] (the "Lessor")

AND

[LESSEE NAME], [COMPANY / FIRM / PROPRIETOR WITH REGISTRATION NUMBER], having its address at [LESSEE ADDRESS], PAN [LESSEE PAN], GSTIN [LESSEE GSTIN], acting through its authorised signatory [SIGNATORY NAME AND DESIGNATION] (the "Lessee").

The Lessor owns the premises described in Schedule 1, being [UNIT NUMBER, FLOOR, BUILDING, FULL ADDRESS WITH PINCODE], with a [CARPET / BUILT-UP / SUPER BUILT-UP] area of [AREA] square feet, together with [NUMBER] car parks (the "Premises").

1. LEASE AND PERMITTED USE
1.1 The Lessor leases the Premises to the Lessee for the term in clause 2.
1.2 The Premises will be used only for [PERMITTED USE, E.G. OFFICE / RETAIL / CLINIC], which the Lessor confirms is permitted by the approved plan, the occupancy certificate and the land use of the property.
1.3 The Lessee will obtain any trade or shop licence its business needs. The Lessor will provide copies of documents in its possession that the Lessee needs for those licences.

2. TERM AND LOCK-IN
2.1 The term is [TERM IN YEARS] years from [LEASE COMMENCEMENT DATE] (the "Commencement Date").
2.2 The Lessee may renew for [NUMBER OF RENEWALS] further term(s) of [RENEWAL YEARS] years each by written notice given at least [RENEWAL NOTICE MONTHS] months before expiry, on the same terms except rent, which will follow clause 4.
2.3 Lock-in: neither party may end this lease during the first [LOCK-IN MONTHS] months, except under clause 15. If the Lessee leaves during the lock-in, the Lessee will pay rent for the rest of the lock-in period.
2.4 After the lock-in, the Lessee may end this lease by [LESSEE NOTICE MONTHS] months' written notice. The Lessor may end it only under clause 15.

3. FIT-OUT PERIOD
3.1 The Lessor will hand over the Premises on [HANDOVER DATE] in the condition described in Schedule 2 (bare shell / warm shell / furnished).
3.2 The Lessee will have a rent-free fit-out period of [FIT-OUT DAYS] days from handover. Maintenance charges [ARE / ARE NOT] payable during the fit-out period.
3.3 The Lessee may carry out non-structural interior works under drawings approved in writing by the Lessor and, where required, by the building management. The Lessor will not unreasonably withhold approval.

4. RENT AND ESCALATION
4.1 Monthly rent is Rs. [MONTHLY RENT IN FIGURES] (Rupees [MONTHLY RENT IN WORDS] only), being Rs. [RATE] per square foot on [AREA BASIS] area, payable in advance by the [DUE DAY] day of each month.
4.2 The rent will increase by [ESCALATION PERCENT] percent every [ESCALATION CYCLE IN MONTHS] months from the Commencement Date, calculated on the rent last payable.
4.3 GST, where applicable, is payable in addition to rent against a valid tax invoice from the Lessor.
4.4 Where the law requires the Lessee to deduct tax at source from rent, the Lessee will deduct it, deposit it and give the Lessor the certificate within the time the law sets.

5. SECURITY DEPOSIT
5.1 The Lessee has paid an interest-free refundable security deposit of Rs. [DEPOSIT IN FIGURES], equal to [NUMBER] months' rent, by [MODE AND REFERENCE].
5.2 The Lessor will refund it on the day the Lessee hands back the Premises, less amounts properly due under this lease, each shown with a bill. If the refund is delayed beyond [GRACE DAYS] days, the Lessee may stay on without paying rent until refund [OR: interest at [RATE] percent a year is payable on the delayed amount].

6. COMMON AREA MAINTENANCE (CAM) AND UTILITIES
6.1 The Lessee will pay common area maintenance of Rs. [CAM RATE] per square foot per month on [AREA BASIS] area [OR: actual share as billed by the maintenance agency], revised only on the basis of actual cost with supporting statements.
6.2 Electricity will be billed on a separate meter at the tariff charged by the supplier [AND DIESEL BACKUP AT ACTUAL COST]. The sanctioned load for the Premises is [SANCTIONED LOAD] kW; any increase is at the Lessee's cost with the Lessor's consent.
6.3 Property tax is payable by the Lessor. [ANY INCREASE IN PROPERTY TAX AFTER THE COMMENCEMENT DATE IS PAYABLE BY: LESSOR / LESSEE].

7. SIGNAGE
The Lessee may put up its name and logo at [LOCATIONS: FACADE / LOBBY DIRECTORY / UNIT ENTRANCE], within the size allowed by the building rules and the local authority. Permissions and any advertisement tax for signage are the Lessee's cost.

8. REPAIRS AND MAINTENANCE
8.1 The Lessor will maintain the structure, roof, external walls, common areas, lifts and building services, and fix structural defects and seepage at its cost.
8.2 The Lessee will maintain the interior, its fit-out and its own equipment.

9. INSURANCE
The Lessor will insure the building. The Lessee will insure its fit-out, contents and third-party liability.

10. ACCESS
The Lessor may enter the Premises at reasonable hours on [ACCESS NOTICE HOURS] hours' notice to inspect or repair, and at any time in an emergency.

11. ASSIGNMENT AND SUBLETTING
The Lessee will not assign or sublet without the Lessor's written consent, except to its group company [PARENT, SUBSIDIARY OR AFFILIATE] on written intimation.

12. COMPLIANCE
12.1 The Lessor confirms the building holds a valid occupancy certificate and fire safety approval for the permitted use, and will keep them valid for building-level matters.
12.2 The Lessee will comply with laws applicable to its own business inside the Premises.

13. RESTORATION ON EXIT
On expiry or earlier termination, the Lessee will remove its movable fit-out and hand back the Premises in [BARE SHELL / THE CONDITION AT HANDOVER], subject to normal wear and tear. Fixed fit-out items listed in Schedule 3 may be left behind without restoration.

14. TITLE AND QUIET ENJOYMENT
The Lessor confirms it has clear title to the Premises, that the Premises are not mortgaged [OR: are mortgaged to [LENDER NAME], whose no-objection to this lease is attached], and that the Lessee may use the Premises without interruption while it complies with this lease.

15. TERMINATION FOR DEFAULT
Either party may end this lease if the other commits a material breach and does not fix it within [CURE DAYS] days of written notice. Non-payment of rent for [ARREARS MONTHS] months is a material breach.

16. STAMP DUTY AND REGISTRATION
This lease will be stamped and registered as required by law. Stamp duty and registration charges will be borne by [LESSOR / LESSEE / SHARED IN RATIO].

17. DISPUTES
Disputes will be referred to arbitration by a sole arbitrator appointed by mutual consent under the Arbitration and Conciliation Act, 1996, seated at [CITY] [OR: courts at [CITY] alone will have jurisdiction].

SCHEDULE 1: DESCRIPTION OF THE PREMISES
[UNIT, FLOOR, AREA, BOUNDARIES, CAR PARK NUMBERS]

SCHEDULE 2: HANDOVER CONDITION
[LIST OF SERVICES AND FINISHES AT HANDOVER]

SCHEDULE 3: FIT-OUT THAT MAY BE LEFT BEHIND
[ITEMS]

For the LESSOR: ______________________   For the LESSEE: ______________________
Name and designation: [NAME]               Name and designation: [NAME]

WITNESSES
1. [WITNESS 1 NAME AND ADDRESS]   Signature: ____________
2. [WITNESS 2 NAME AND ADDRESS]   Signature: ____________

This is a sample, not legal advice. Have a lawyer review it for your state and your deal before anyone signs.

What to check, clause by clause

Numbered as they appear in the template.

How to complete it

In the order it happens.

1. 1

   Agree the commercial terms in a short term sheet: area, rent, escalation, deposit, lock-in, fit-out period, CAM.

2. 2

   Collect and check the owner's title, the approved plan, the occupancy certificate and fire safety approval.

3. 3

   Fill in the template, attach the schedules and have both sides' lawyers review it.

4. 4

   Pay stamp duty at the rate your state charges and register the lease at the sub-registrar.

5. 5

   Record the handover condition with photographs before the fit-out starts.

Questions people ask

Sources

• Registration Act, 1908, section 17(1)(d)
• Transfer of Property Act, 1882, section 107
• Central Goods and Services Tax Act, 2017 and notifications on renting of immovable property
• Arbitration and Conciliation Act, 1996
• Your state's stamp act and its schedule for leases