A landlord in Karol Bagh finds his tenant has sublet half the shop to a mobile repair business and is told, correctly, that the lease never said he could not. A tenant in Okhla is served with a fifteen-day notice to vacate a warehouse he thought he had for five years, because the lease was never registered. A restaurant owner in Hauz Khas keeps paying rent through a closure because nothing in his lease said otherwise. Each of them discovered what the Transfer of Property Act says by default. This page is about writing a lease so that you decide those questions instead.
Most people in Delhi meet only two letting documents: the eleven-month rent agreement for a flat, and — increasingly — the leave and licence agreement. Both have their place, and both are covered in their own guides on this site: our rent agreement guide explains why residential lets are so often for eleven months, and our leave and licence guide explains how the courts decide whether a document that calls itself a licence is really a lease.
This page is about the third document, and the one that most commercial occupiers actually need: a formal lease. Section 105 of the Transfer of Property Act defines a lease as a transfer of a right to enjoy immovable property, made for a certain time, in consideration of a price paid or promised, or of money or other things to be rendered periodically. What distinguishes it in practice is that the lessee takes exclusive possession of defined premises for a term, and acquires an interest in them that the lessor cannot simply withdraw.
That describes most business premises. A standalone shop with its own shutter, taken for five years and fitted out at the tenant’s cost. An office floor in a commercial building. A warehouse or factory shed. A restaurant, clinic, coaching centre, school or showroom. A residential house let to a company for its director for three years. In each of these the occupier is investing in the premises and needs security of term; the owner needs certainty of rent and a way to get the premises back. A licence cannot safely give either, and an eleven-month agreement does not last long enough.
The rest of this page is about the terms of such a lease, the rules the law applies when the lease does not deal with a question, and the handful of provisions that decide most disputes between commercial landlords and tenants.
Rent control laws once governed most tenancies in Delhi, fixing standard rent and restricting eviction to specified grounds. They still exist, but in Delhi their reach is narrow. As our leave and licence guide explains, the Delhi Rent Control Act, 1958 does not apply to premises whose monthly rent exceeds a modest figure fixed decades ago, which today excludes almost every shop, office and warehouse let at a market rent.
The consequence is that a commercial tenancy in Delhi is governed by the Transfer of Property Act and by the lease itself. There is no statutory standard rent, no rent controller, and no list of permitted eviction grounds. The landlord can recover possession after the lease ends or is lawfully terminated, through a civil suit if the tenant will not leave, and the tenant has no statutory protection beyond what the lease and the Act give.
This makes the drafting unusually important. Under rent control, many questions were answered by the statute whatever the document said. Under the Transfer of Property Act, most of the rules in Sections 106 to 116 apply only “in the absence of a contract to the contrary”. A well-drafted lease therefore replaces the Act’s default rules with the parties’ own; a thin lease leaves them in place, and some of those defaults surprise both sides.
The same is broadly true in Noida, Gurugram and other NCR cities, where commercial rents are also above whatever rent control thresholds exist and tenancy is governed by the general law and the lease. Where a State has adopted a new tenancy law on the lines of the Model Tenancy Act, 2021, that law may add requirements, including registration of the tenancy with a rent authority.
A lease from year to year, for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument under Section 107 of the Transfer of Property Act, and Section 17 of the Registration Act makes such leases compulsorily registrable. The rules, and the reason residential lets are kept to eleven months to avoid them, are explained on our rent agreement guide. A commercial lease for three, five or nine years has no such escape: it must be registered.
What happens when it is not is the single most important thing a commercial tenant should understand. An unregistered lease for more than a year does not create the lease it describes. But the law does not pretend nothing happened either. In Anthony v. K.C. Ittoop and Sons (2000), the Supreme Court held that where a lessee has been put into possession and pays rent, a tenancy arises from that conduct even though the unregistered document cannot create the intended lease — and the tenancy so arising is governed by Section 106: month to month for most purposes, year to year for manufacturing.
In plain terms, a tenant who signed an unregistered five-year lease for a shop, and spent lakhs on the fit-out, may be holding a month-to-month tenancy that the landlord can end on fifteen days’ notice. The lock-in he relied on, the fixed escalation, the renewal option — none of it may be enforceable as a term of the lease. The unregistered document can still be looked at for collateral purposes, but it does not give him the five years.
The lesson is simple. A commercial lease for more than a year should be stamped and registered, and the tenant, who has the most to lose from its absence, is usually the one who should insist.
Get a registered lease drafted — pay after the work
Stamp duty on a lease is charged differently from a sale. It is not charged on the value of the property, but on the rent — generally on the average annual rent reserved, at a percentage that rises with the length of the term, so that a longer lease pays more. Where the lease also provides for a premium, fine or other money paid up front, that amount is chargeable too, and a large non-refundable payment can change the duty significantly.
A refundable security deposit is a recurring question. Whether and how it is brought into the calculation depends on the State’s stamp law and how the deposit is described. A deposit that is in substance an advance of rent, or is not refundable, is more likely to be charged; one that is genuinely refundable security often is not, or is charged at a lower rate. The lease should describe the deposit accurately, because under Section 27 of the Stamp Act every fact affecting the duty must be set out in the instrument.
The rates in Delhi are set in the schedule to the Stamp Act as it applies there, and they, and the treatment of deposits and escalations, are revised from time to time. Where rent escalates during the term, the average of the rent over the term is usually what counts. We work out the figure for each lease on the day of stamping, and duty is paid by e-stamp — see our e-stamp paper guide.
Registration fee is payable in addition. An insufficiently stamped lease cannot be admitted in evidence until the deficient duty and penalty are paid, which means a tenant or landlord who under-stamped to save money finds, at the moment he needs the lease in court, that he has to pay more than he saved.
The term is the length of the lease: three years, five, nine, fifteen. Commercial tenants usually want a long term, because moving a business is expensive; landlords often prefer a shorter term with renewals, so that rent can be reset. The common compromise is an initial term with one or more renewal options in the tenant’s favour, at an agreed escalation.
The lock-in is the part of the term during which a party cannot terminate early. It is what makes a commercial lease commercially sensible for a landlord who is giving a rent-free fit-out period or who has altered the premises for the tenant. Lock-ins can bind the tenant only, the landlord only, or both, and for part or all of the term. A lease that locks the tenant in for three years while allowing the landlord to terminate on three months’ notice is lopsided, and a tenant should ask for the landlord to be locked in for at least as long.
What happens if a party leaves during the lock-in should be stated. The usual provision is that the departing party pays rent for the unexpired lock-in period, sometimes less the deposit. Courts treat such sums under Section 74 of the Indian Contract Act as a ceiling on reasonable compensation, not an automatic entitlement, and a landlord who promptly re-lets the premises will find it harder to recover the full amount. A realistic lock-in sum is more likely to be upheld than an inflated one.
A renewal clause should say who may renew, how and by when notice of renewal must be given, at what rent, and whether the renewed lease will be on the same terms. A renewal for more than a year is itself a lease requiring registration, and the renewed lease should be registered when it takes effect.
The rent clause should state the monthly rent, whether it includes or excludes GST, maintenance and other charges, the due date, the mode of payment, and interest on late payment. Payment by bank transfer creates the record both sides will need; cash rent, still common in some markets, creates disputes about what was paid.
Escalation is the agreed increase in rent over the term. Market practice varies — a fixed percentage every year, or a larger step every three years — and neither is prescribed by law. The lease should say exactly when each increase takes effect and on what base, so that the rent for every month of the term can be calculated from the document alone. Escalation clauses that refer to “market rent” without a mechanism for fixing it lead to disputes at each step.
A rent-free period for fit-out — often one to three months for a shop or office — is common where the tenant is spending money on the premises. The lease should say whether the rent-free period is also free of maintenance charges, when it starts (on handover of keys, not on signing), and whether it is forfeited if the tenant leaves during the lock-in.
For retail premises in malls and high streets, rent is sometimes a combination of a minimum guaranteed rent and a share of the tenant’s turnover. Such arrangements need a precise definition of turnover, reporting and audit rights; the drafting points are the same as in our revenue sharing agreement service.
Commercial deposits are larger than residential ones — three to twelve months’ rent is not unusual, depending on the market and the fit-out — and the amounts involved make the deposit clause worth reading carefully from both sides.
The clause should state the amount, that it is interest-free or carries interest, what it secures (rent, charges, damage, restoration), when and how it may be adjusted, and the refund date after the tenant hands back possession. A refund linked to “re-letting of the premises” leaves the tenant waiting on an event the landlord controls, and should be replaced by a fixed number of days after handover, with interest if the refund is late.
Tenants frequently want to adjust the deposit against the last months’ rent. Landlords resist, because that leaves nothing to cover damage or unpaid bills. The usual answer is to allow adjustment of part of the deposit, with the balance refunded after a joint inspection and final meter readings. Whatever is agreed should be written down; an informal understanding that “the deposit covers the last three months” is the source of many disputes.
Deductions should be limited to what the deposit secures, and backed by evidence — the handover inventory, photographs and bills. A clause allowing the landlord to forfeit the whole deposit for any breach is likely to be treated as a penalty.
Renting of commercial property is a taxable supply of services under GST, generally at eighteen per cent. A landlord registered under GST charges it on the rent and issues a tax invoice, and a registered tenant can usually take input tax credit, so the rent clause should say whether the figure is exclusive or inclusive of GST.
Two special rules move the liability to the tenant under reverse charge. Since October 2024, where an unregistered person rents commercial property to a registered person, the tenant pays the GST. And since 2022, renting a residential dwelling to a registered person has also been under reverse charge. A tenant business renting from an individual landlord who is not registered should therefore check whether it has a reverse-charge liability. These rules are changed by notification, and a chartered accountant should confirm the current position for any particular lease.
Tax deduction at source on rent is a separate obligation. Business tenants paying rent above the prescribed annual threshold must deduct tax at the rate prescribed for rent of land and buildings and deposit it; individuals not subject to tax audit must deduct where the monthly rent exceeds the prescribed amount. The landlord’s PAN should be in the lease. Income-tax law was re-enacted with effect from April 2026, so the section references have changed; the tenant’s accountant should confirm the current provisions.
In a commercial building the rent is rarely the whole cost. Common area maintenance charges cover security, housekeeping, lifts, common electricity, power backup, and upkeep of common areas, and are usually charged per square foot per month. The lease should say who fixes CAM, how it may be revised, and whether the tenant can see the basis of the charge.
Utilities — electricity, water, gas, telephone and internet — are normally the tenant’s, and the lease should record the meter numbers and opening readings on handover. Where power backup is provided by the building, its rate and the load sanctioned to the premises should be stated. A restaurant or clinic may need a higher electricity load than the premises has; whether the landlord will apply for it, and who pays, should be settled before signing.
Outgoings on the property itself — municipal property tax, ground rent where the land is leasehold, insurance of the structure — are ordinarily the landlord’s. Section 108(g) of the Transfer of Property Act provides that if the lessor neglects to make any payment which he is bound to make and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make it himself and deduct it, with interest, from the rent. The lease can shift outgoings to the tenant, but it should do so expressly.
Signage on the building front, parking spaces for the tenant’s staff and customers, access hours, and the use of common areas for deliveries or queues are all matters that commonly lead to friction and are best written into the lease rather than left to the building manager.
A lease should say what the premises may be used for — a garments showroom, a dental clinic, a software office, a cloud kitchen — and forbid other uses without consent. Section 108(o) of the Transfer of Property Act already prohibits the lessee from using the property for a purpose other than that for which it was leased, but a use clause that is specific removes argument about what that purpose was.
The harder question is whether the use is lawful at that address. In Delhi, the Master Plan and the municipal rules decide what may be carried on where: which streets permit commercial or mixed use, whether conversion or parking charges must be paid, and which activities need their own permissions. A restaurant needs a health or eating house licence and food safety registration; many businesses need a fire safety certificate above certain sizes; a factory needs consent from the pollution board; a clinic may need registration under the applicable establishment law. Our business licences guide sets out how these permissions fit together.
The lease should say who is responsible for which permission. The landlord is usually the right party for anything that attaches to the building — conversion charges, the sanctioned plan, the building’s fire certificate. The tenant is usually responsible for licences that attach to the business. Where a licence can be obtained only with the landlord’s documents or consent, the landlord should undertake to provide them — often in the form of a landlord NOC.
A tenant taking premises for a business that depends on a licence should consider making the lease conditional on obtaining it, or giving himself a right to terminate without penalty if it is refused. A five-year lock-in for a restaurant that cannot get its licence at that address is a very expensive mistake.
Repairs cause more day-to-day friction between commercial landlords and tenants than anything else, and the Transfer of Property Act’s default rule is less clear than most people think.
Section 108(m) requires the lessee to keep the property in as good a condition as it was in when he was put in possession, subject to changes caused by reasonable wear and tear or irresistible force, and to restore it in that condition at the end of the lease. Section 108(f) provides that if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make, the lessee may make them himself and deduct the expense, with interest, from the rent. The Act does not itself say which repairs the lessor is “bound to make” — that has to come from the lease.
A commercial lease should therefore draw the line explicitly. The usual line is that structural repairs — the roof, external walls, foundations, main plumbing and drainage, and seepage from outside the premises — are the landlord’s; and internal and day-to-day repairs — fittings, fixtures installed by the tenant, internal wiring beyond the distribution board, paint and minor plumbing — are the tenant’s. The lease should give a response time for landlord repairs, and an express right for the tenant to carry them out and deduct the cost if they are not done after notice.
Seepage, a leaking roof in the monsoon, and a failed common drain are the classic disputes. A tenant who writes to the landlord, with photographs and a date, starts the clock that Section 108(f) and the lease depend on; a tenant who telephones does not.
Commercial tenants spend heavily on their premises — partitions, flooring, false ceilings, air conditioning, kitchens, shelving, signage. The lease has to answer three questions about that investment: what may be done, what may be removed, and what must be restored.
On what may be done, Section 108(p) provides that the lessee must not, without the lessor’s consent, erect on the property any permanent structure, except for agricultural purposes. A commercial lease should attach or describe the approved fit-out plan and state that the landlord consents to it, and require consent for later alterations. Any work needing the building authority’s approval should be the tenant’s responsibility to obtain, with the landlord’s signature where the application needs the owner.
On what may be removed, Section 108(h) allows the lessee, even after the determination of the lease, to remove, at any time while he is in possession, all things which he has attached to the earth, provided he leaves the property in the state in which he received it. The lease can modify this — for example by providing that air-conditioning units and fixed installations stay, with or without payment.
On what must be restored, the lease should say whether the tenant must remove its fit-out and return the premises in their original “bare shell” condition, or may leave it in place. For a landlord re-letting to a similar business, an intact fit-out can be an asset; for one re-letting to a different business, it is a cost. Photographs of the premises at handover are the only reliable record of what “original condition” means.
Ask a Delhi landlord whether a tenant can sublet without permission, and almost every one will say no. Under the Transfer of Property Act, the answer is the opposite.
Section 108(j). The lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease.
Transfer of Property Act, 1882 — Section 108(j), which applies in the absence of a contract or local usage to the contrary.
That rule is a default, and like the other rules in Section 108 it yields to a contract to the contrary. But it means that a lease which is silent on subletting permits it. The belief that subletting is always forbidden comes from rent control laws, which commonly made unauthorised subletting a ground for eviction; for a tenancy governed only by the Transfer of Property Act, that protection exists only if the lease creates it.
A landlord who does not want the premises sublet, assigned, shared or used by a group company should therefore say so expressly, and should also deal with the less obvious routes: a change in control of a tenant company, which transfers the business without transferring the lease; a franchise arrangement under which a third party runs the business (see our franchise agreement guide); and shop-in-shop counters licensed by the tenant. A tenant who wants flexibility — to assign on selling the business, or to share with an affiliate — should negotiate it into the lease rather than rely on the default, because landlords increasingly draft the default out.
Note the last sentence of the section. A tenant who assigns remains liable on the lease unless the landlord releases him. A seller of a business who assigns the shop lease to the buyer should obtain that release in writing.
Every lease should state how either party may end it, and with what notice. If it does not, Section 106 supplies the rule — and for most commercial premises the rule is much shorter than the parties expect.
Section 106(1). In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice.
Transfer of Property Act, 1882 — Section 106(1), as substituted in 2002.
The rest of the section, as substituted in 2002, deals with the notice itself. The period runs from the date of receipt of the notice. A notice is not invalid merely because the period mentioned in it falls short of the statutory period, provided the suit or proceeding is filed after the statutory period expires — which removed an old trap in which notices were struck down for expiring on the wrong day. And every notice must be in writing, signed by or on behalf of the person giving it, and sent by post or delivered personally, or, if that is not possible, affixed to a conspicuous part of the property.
For a shop, office or warehouse used for trade rather than manufacture, the default is therefore fifteen days. That is why an unregistered long lease, which falls back into a month-to-month tenancy, is so dangerous for a tenant. A registered lease for a fixed term, with an agreed notice period for early termination and a lock-in, replaces the default and gives both sides the certainty the business needs. Notices should be sent to the addresses stated in the lease, which should also allow email as an additional means.
Section 111 lists the ways a lease ends: by efflux of the time limited by it, by the happening of an event on which it is to end, by surrender, by notice to quit, and by forfeiture. Forfeiture arises where the lessee breaks an express condition which provides that, on breach, the lessor may re-enter — typically non-payment of rent or unauthorised use — or where the lessee renounces the lessor’s title; and in either case the lessor, or his transferee, must give notice in writing of his intention to determine the lease.
For a landlord, the important qualification is Section 114. Where a lease has been determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, the court may, if at the hearing the lessee pays or tenders the arrears together with interest and full costs, or gives security for doing so within fifteen days, relieve the lessee against the forfeiture instead of passing a decree for ejectment. Section 114A requires, for forfeiture on breach of other express conditions, that the lessor first serve a notice specifying the breach and, where it is capable of remedy, requiring it to be remedied, and give a reasonable time to do so — though that section does not apply to conditions against assigning, underletting or parting with possession, or to forfeiture for non-payment of rent.
The practical effect is that a commercial landlord cannot treat a missed month’s rent as an automatic end of the lease. Where the tenant is willing to pay up, the court has power to keep the lease alive. A landlord who wants the premises back should rely on the lease’s termination and lock-in provisions and proper notice, not on a forfeiture that the court may undo.
A tenant, for his part, should not assume that relief will always be given; it is discretionary, and a history of repeated default weighs against it. The best protection for both sides is a clear rent clause, a grace period, and a written demand before any termination.
A lease ends; the tenant does not leave. What the law calls the tenant’s position then depends on what the landlord does.
Section 116 provides that if a lessee remains in possession after the determination of the lease and the lessor or his legal representative accepts rent from him or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased, as specified in Section 106. That is holding over: a new periodic tenancy created by the landlord’s conduct.
If the landlord does not assent — if he refuses rent, or accepts money expressly as damages for use and occupation while demanding possession — the tenant who stays on is a tenant at sufferance. He has no right to remain, and he is liable for mesne profits: the profits the landlord could have made from the premises during the unlawful occupation, which courts commonly assess by reference to the market rent. A suit for possession will usually include a claim for mesne profits, and the court can direct an enquiry into them.
Two drafting points follow. A lease should state an agreed rate of use and occupation charges for any period of overstay, often a multiple of the last rent, which gives both sides a number. And a landlord who wants the premises back should not accept ordinary rent after expiry without a clear written reservation, because that acceptance is exactly what Section 116 treats as assent.
What happens to rent when the premises cannot be used is a question the pandemic put to thousands of commercial tenants in Delhi, and the answer surprised many of them.
The general doctrine of frustration in Section 56 of the Indian Contract Act — that a contract becomes void when performance becomes impossible — does not apply to a lease. The Supreme Court held in Raja Dhruv Dev Chand v. Raja Harmohinder Singh (1968) that a lease is not merely a contract but a completed transfer of an interest in property, so Section 56 has no application to it. The relevant provision is instead Section 108(e): if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property is wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void — provided the injury was not caused by the lessee’s own wrongful act.
A temporary closure of a shop that remains physically intact is not permanent unfitness. The Delhi High Court, in a case decided during the 2020 lockdown, Ramanand v. Dr. Girish Soni, declined to suspend rent for a tenant whose lease had no force majeure clause, while indicating that the answer turns on the contract. Where a lease does have a force majeure clause covering such events, the tenant may have remedies under it.
The conclusion is a drafting one. A commercial lease should contain a force majeure clause that says what events count — including government orders closing the premises — and what follows: suspension or reduction of rent, extension of the term, and a right to terminate if the event lasts beyond a set period. Without such a clause, the tenant is largely left with Section 108(e).
When a commercial lease ends in a dispute, there are three routes, and the lease can choose between them.
Arbitration. The Supreme Court held in Vidya Drolia v. Durga Trading Corporation (2020) that landlord-tenant disputes governed by the Transfer of Property Act are arbitrable, unlike disputes under rent control statutes that confer exclusive jurisdiction on a special forum. A commercial lease can therefore include an arbitration clause under the Arbitration and Conciliation Act, 1996, with a named seat, and many do. Arbitration is private and can be faster, though its cost falls on the parties.
The commercial courts. The Commercial Courts Act, 2015 includes in its definition of commercial disputes those arising out of agreements relating to immovable property used exclusively in trade or commerce. Where such a dispute meets the specified value, it goes to the commercial court, and under Section 12A a suit that does not contemplate urgent interim relief cannot be filed without first exhausting pre-institution mediation. The Supreme Court held in Patil Automation v. Rakheja Engineers (2022) that this requirement is mandatory.
An ordinary civil suit for possession and mesne profits is the route where neither of those applies. In each case, the preparation is documentary — the registered lease, the notices and their proof of delivery, the rent record — and the proceedings themselves are for your advocate, engaged and paid by you directly; our find an advocate page can help. Before any of it, a properly drafted legal notice resolves a surprising number of disputes.
Draft the lease so these questions are answered in advance
At the other end of the scale are long leases — thirty, sixty or ninety-nine years — common for industrial plots, institutional land, and some commercial buildings. Their economics are different: the lessee usually pays a large premium up front and a small annual rent, so that the transaction resembles a sale more than a letting.
Legally it remains a lease. The lessor keeps the reversion, the lessee holds for the term, and the lease conditions — use, transfer, construction — bind for its whole length. Stamp duty on a long lease with a premium is usually substantial, because both the premium and the rent are chargeable, and in some States a very long lease is charged as if it were a conveyance.
The clauses that matter most in a long lease are those on transfer (whether the lessee may sell or mortgage the leasehold, and on what conditions), construction (what may be built and by when), renewal at the end of the term, and what happens to buildings on the land when the lease ends. Where the lessor is a public authority, those conditions are usually set by the authority’s own rules, and a buyer of such a leasehold should read them as carefully as the lease. For how public leaseholds in Delhi are converted to freehold, see our conveyance deed guide.
A lease is only as good as the lessor’s right to grant it and the premises’ fitness for the use intended. A few checks before signing avoid most of the serious problems.
The tenant should check that the landlord owns the premises or is entitled to let them — the title document, and for co-owned property the consent of all co-owners; that any mortgage on the property permits letting, or that the bank has consented, because a lease granted in breach of a mortgage can be at risk if the bank enforces; that the use is permitted at that address; that there is no existing tenant or dispute; and that the building has the approvals its use needs. Our title verification guide explains what a title check covers.
The landlord should check the tenant: for a company, its incorporation, board resolution and authorised signatory; for an individual, identity and address; in either case, the business to be carried on and whether it will need licences the landlord must support. Where the tenant is a new company with no track record, a personal guarantee from its promoters or a larger deposit is a reasonable request.
Both sides should confirm that the society or association, if any, permits the proposed use, and should agree who will complete police verification of the tenant where the local rules require it for commercial premises.
A clothing retailer wants a ground-floor shop in Lajpat Nagar for six years. The owner is a family: a widow and her two sons, who inherited the building. The retailer will spend a considerable sum on the fit-out and wants two months rent-free.
The lease is drafted with all three owners as lessors, after checking that the property has been mutated in their names and that the building carries no mortgage. The term is six years, in two blocks of three with a renewal option for the tenant at a fixed escalation. Both sides are locked in for the first three years, with rent for the unexpired lock-in payable by a party leaving early. The rent-free period starts on handover of keys and covers rent but not CAM. The deposit is six months’ rent, interest-free, refundable within thirty days of handover after a joint inspection.
The lease forbids subletting and assignment without consent, but allows assignment to a buyer of the tenant’s business on the landlords’ reasonable consent. Structural repairs and roof seepage are the landlords’; everything inside the shutter is the tenant’s. The approved fit-out plan is annexed; on exit the tenant may remove its fixtures but must restore the flooring. A force majeure clause suspends rent if government orders close the market for more than fifteen days. Notice is by post and email to stated addresses. Disputes go first to mediation and then to arbitration seated in Delhi.
The lease is stamped on the average annual rent over six years, and registered with all three owners and the retailer’s authorised signatory present. At handover, the parties sign an inventory with photographs and the meter readings. Each of those steps answers, in advance, a question that would otherwise be answered by the Transfer of Property Act’s defaults.
Most lease disputes at the end are about the condition of the premises and the deposit, and both are decided by what was recorded at the start.
On the day of handover, record an inventory of fixtures and fittings, date-stamped photographs or a video of every room and surface, the electricity and water meter numbers and readings, the number of keys and access cards, and any existing defects. Both parties should sign it. Do the same on the day the premises are returned, and compare.
Keep the registered lease, the e-stamp certificate, the handover record, every rent receipt or bank record, the GST invoices and TDS certificates, the CAM statements, and every notice and letter with proof of delivery. Diarise the lock-in end date, each escalation date, the renewal notice date and the expiry date. Most disputes about notice arise because one of those dates was missed.
For a landlord, the file also needs the tenant’s KYC and, for a company, the board resolution and signatory authority. For a tenant, it needs the landlord’s title documents, any NOC given for licences, and the bank’s consent if the property was mortgaged.
Lease agreement drafting is ₹900 and ordinarily takes 1 – 2 days. The work is documentation: drafting a lease that answers the questions the Transfer of Property Act would otherwise answer for you, working out the stamp duty, and preparing it for registration.
| What is included | Why it matters |
|---|---|
| Confirming lease, not licence or rent agreement | The wrong instrument changes every right |
| Term, lock-in, renewal and escalation | Certainty for both sides, calculable month by month |
| Deposit, rent-free period, CAM and GST treatment | Where the money disputes arise |
| Repairs, fit-out and restoration | Section 108 is silent on who must repair what |
| Subletting, assignment and change of control | Section 108(j) permits them unless you say otherwise |
| Notice, termination, holding over and overstay charges | Replacing the fifteen-day default |
| Force majeure and dispute resolution | Section 56 does not apply to leases |
| Stamp duty calculation and registration file | An unregistered long lease becomes month to month |
Stamp duty and registration fees are at actuals. Nothing is payable in advance. We do not value rent or act as brokers, and we do not give tax advice. Eviction suits, arbitration and commercial court proceedings are for your advocate, whose fee is engaged and paid by you directly; we do not quote, collect or share it.
A commercial lease that says nothing about subletting permits it. One that says nothing about notice can be ended on fifteen days. One that is not registered may not be a lease for its term at all. One without a force majeure clause leaves the tenant paying through a closure. Send us the premises details, the parties and the commercial terms you have agreed. We will draft a lease that answers each of these in writing, calculate the stamp duty, and prepare it for registration.
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Search Bar Council enrolled advocates by what your matter is about, by court, or by city. Searching and sending a request are both free.
Enrolled advocates anywhere in India can apply to be listed. Your entry is published only after we verify your enrolment number with your State Bar Council.
This directory carries no ratings, no reviews, no rankings and no fees — only the factual particulars the Bar Council of India permits, published at each advocate's own request. Browse the network · Terms for Advocates