Commercial Lease Agreement (Drafting)

Transfer of property Act, 1882 lease is defined as “A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

As per definition of Transfer of property Act, 1882 lease is defined as “A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lease agreement is legally enforceable agreement.

 

COMMERCIAL LEASE AGREEMENT

 

BASIC INFORMATION

 

As per definition of Transfer of property Act, 1882 lease is defined as “A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

 Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.

 

Getting more specific to one of the segment of lease agreement is commercial. Tenants who lease commercial properties have a variety of lease types available.Commercial lease agreement assign more responsibility on the tenant and provide greater up-front profit for the landlord.

In some cases commercial leases require the tenant to paylandlord's operational costsalong with the rent, while others require tenants to pay insurance along with rent. The four most common types of commercial real estate leases include:

1.Gross Lease: Tenants pay rent while the landlord is responsible for other costs. 

2.Single-Net Lease: In this kind of lease, the tenant is responsible for paying property taxes.

3.Double-Net Lease: These leases make a tenant responsible for property taxes and insurance.

4.Triple-Net Lease: Tenants who sign these leases pay property taxes, insurance, and maintenance costs.

 

FEATURES OF LEASE AGREEMENT

 

1. ALTERATIONS TO THE PROPERTY: Lease agreement specifically provide clause of alteration in the property by the tenant/landlord so one of them will be free from extra additional expenses to repair the same on other hand to make such alteration in the said property the tenant need to take the prior written consent of the owner if the agreement clause is included in the lease agreement.

 

2. LEGALLY ENFORCEABLE: Lease agreement is legally enforceable agreement. On the breach of any terms and condition of lease agreement by lessor or lessee they both can sue each other on the basis of Lease agreement.

 

3. RIGHT TO ENTRY: Lease agreement gives right to the landlord to enter and inspect the property which is given under the lease agreement if the clause in include in the lease agreement.

 

4. PEACE OF MIND: As you are taking premises on lease for the commercial purpose you need to follow all the steps for execution of commercial lease agreement to avoid further dispute once you have execute the valid commercial lease agreement you will get the peace of mind as all the clauses are covered under the commercial lease agreement.

 

Documents


Passport Photo

Passport photo of all parties.


PAN Card

PAN card of all parties.


Aadhar Card

Aadhar card of all parties.


Utility Bill

Utility bill of Electricity or Telephone.


Address Proof

Valid Address Proof of all the parties.


Licence

Valid Driving Licence of all the parties.


Terms and Conditions

Terms and Conditions between the parties.


Other Documents

Other documents will be intimated through e-mail.

FAQ

The Commercial lease agreement is an agreement between landlord and tenant to rent property with the intention to operate a business.

Some of the terms to Include In Your Commercial Lease Agreement are about- The Parties & Personal Guarantees, Lease Term & Renewals, Rent Payments and Expenses, Business Protection Clauses Etc.

One who transfers the property is known as the lessor or transferor and the one who receives the property is known as the lessee or transferee.

The term period of a commercial lease agreement is generally mentioned in the agreement. Usually these commercial lease agreements are for long term.

The rental agreement forms an important part of your business and the conditions therein, will impact your business and activities, as long as you are in those premises. A lease agreement is usually drafted by the landlord and thus, may contain several conditions that favour the landlord.

Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favour of the licensee. A licensee cannot give the premises on rent to a third party under any circumstances.

The lease is the key document of the tenancy, setting out important issues such as the length of the tenancy. The amount of rent and deposits the tenant must pay.

A commercial lease is used by a tenant to rent space for a business while a residential lease is used by a tenant to rent a home or space to personally reside in.