Legal Format • Commercial Property
Commercial Rent Agreement Format for Office, Shop & Business Premises
This sample commercial rent agreement can be adapted for an office, shop or other business premises in India. It covers rent, permitted use, utilities, repairs, alterations, subletting, inspection, termination, handover and execution.
The Transfer of Property Act, 1882 defines a lease and sets out general rights and liabilities of lessors and lessees. The parties should also check the applicable State rent law, stamp law, local land-use or municipal requirements, and any sector-specific licence conditions relevant to the proposed business.
Before You Sign a Commercial Rent Agreement
Confirm the landlord's title or authority to lease, identify the premises precisely, state the permitted commercial use, record the lease term and renewal terms, rent and escalation, security deposit, utilities and common-area charges, repair obligations, fit-out rights, taxes, insurance, signage, access, subletting restrictions, termination procedure and handover condition. Where registration is required, execute and present the instrument in accordance with the Registration Act and local registration rules.
This is a general drafting format. Commercial leasing requirements vary by State, property type and transaction. Obtain local professional advice before execution, especially for long-term leases, high-value premises, regulated businesses or complex fit-out arrangements.
RENT AGREEMENT FOR COMMERCIAL PROPERTY
This Rent Agreement is made at ____________ on this ____ day of ____________, 20____.
BETWEEN
________________________________________, son/daughter/spouse of ________________________________, residing/having office at ________________________________________, hereinafter referred to as the -Landlord/Lessor- (which expression shall, unless repugnant to the context, include the person's lawful heirs, legal representatives, successors and permitted assigns) of the First Part;
AND
________________________________________, son/daughter/spouse of / a proprietorship / partnership / LLP / company having its address or registered office at ________________________________________, hereinafter referred to as the -Tenant/Lessee- (which expression shall, unless repugnant to the context, include lawful successors and permitted assigns) of the Second Part.
The Landlord/Lessor and Tenant/Lessee are individually a -Party- and collectively the -Parties-.
Recitals
A. The Landlord/Lessor represents that the Landlord/Lessor is lawfully entitled to lease the commercial premises situated at ________________________________________, measuring approximately ________ sq. ft., together with the fixtures, fittings and appurtenant rights specifically described in this Agreement (-Premises-).
B. The Tenant/Lessee has requested the Premises for the permitted commercial use stated below, and the Landlord/Lessor has agreed to let the Premises on the following terms.
1. Term and Possession
The lease shall commence on ____________ and continue until ____________, unless terminated earlier in accordance with this Agreement. Possession shall be delivered on ____________. Any renewal or extension shall be by written agreement and shall comply with applicable stamp and registration requirements.
2. Rent, Deposit and Payment
- Monthly rent: ₹ ____________, payable on or before the ____ day of each month by ____________.
- Security deposit: ₹ ____________, refundable subject to lawful deductions and the terms of this Agreement.
- Rent escalation, if any: ________________________________________.
- Taxes required to be deducted or collected under applicable law shall be dealt with by the Parties in accordance with law.
3. Permitted Use
The Premises shall be used only for ________________________________________ and for no unlawful or unauthorised purpose. The Tenant/Lessee shall obtain and maintain licences, registrations and approvals required for its business and shall comply with applicable building, fire, safety, environmental, municipal and land-use requirements.
4. Electricity, Utilities and Common Charges
The Tenant/Lessee shall pay charges for electricity, internet, telephone and other utilities consumed for its operations, and the following maintenance/common-area charges, if applicable: ________________________________________.
5. Alterations, Fit-outs and Signage
No structural alteration shall be made without the Landlord/Lessor's prior written consent and any approval required by law. Non-structural fit-outs, partitions, fixtures or signage may be installed only as agreed in writing and subject to applicable rules. At termination, the Tenant/Lessee shall remove its installations and restore the Premises to the agreed handover condition, reasonable wear and tear excepted.
6. Nuisance, Safety and Prohibited Materials
The Tenant/Lessee shall not cause nuisance, obstruction or unreasonable interference with other lawful occupiers and shall not store prohibited, dangerous, highly inflammable or explosive material except where lawfully permitted and safely handled for the approved business.
7. Subletting and Assignment
The Tenant/Lessee shall not sublet, licence, assign, transfer or part with possession of the whole or any part of the Premises without the Landlord/Lessor's prior written consent, except as otherwise expressly provided in this Agreement or required by law.
8. Inspection and Access
Upon reasonable prior notice, except in an emergency, the Landlord/Lessor or authorised representatives may enter the Premises at reasonable times to inspect its condition or carry out repairs, maintenance or works for which the Landlord/Lessor is responsible.
9. Repairs and Maintenance
- The Tenant/Lessee shall keep the interior and Tenant-installed fixtures in reasonable condition, subject to ordinary wear and tear.
- The Landlord/Lessor shall remain responsible for structural repairs and other obligations specifically allocated to the Landlord/Lessor under this Agreement or applicable law.
- Any allocation of repair obligations shall be read subject to mandatory law that cannot be contracted out of.
10. Property Taxes and Other Outgoings
Property tax and ownership-related statutory outgoings shall be borne by ____________. Business-specific charges, consumption-based utility charges and taxes attributable to the Tenant/Lessee's operations shall be borne by ____________, subject to applicable law.
11. Insurance
The Parties shall maintain such insurance as is agreed or required by law. The Landlord/Lessor shall be responsible for ________________________________________, and the Tenant/Lessee for ________________________________________.
12. Quiet Enjoyment
Subject to payment of rent and compliance with this Agreement, the Tenant/Lessee shall be entitled to peacefully use and enjoy the Premises during the agreed term without unlawful interference by the Landlord/Lessor or persons claiming through the Landlord/Lessor.
13. Default and Termination
If a Party commits a material breach, the other Party may issue written notice specifying the breach and allowing ____ days to cure it where the breach is capable of cure. If the breach is not cured within the notice period, the non-defaulting Party may terminate the Agreement in accordance with its terms and applicable law.
Either Party may otherwise terminate the lease by giving ____ days/months' written notice, if such termination is permitted under the agreed lock-in period and applicable law.
14. Handover on Expiry or Termination
On expiry or lawful termination, the Tenant/Lessee shall hand over peaceful vacant possession together with the Landlord/Lessor's fixtures and fittings in the agreed condition, reasonable wear and tear and damage caused by events beyond the Tenant/Lessee's reasonable control excepted, subject to the terms of this Agreement.
15. Notices
Notices under this Agreement shall be in writing and delivered to the addresses/e-mail addresses stated below or to any updated address notified in writing:
Landlord/Lessor: ________________________________________
Tenant/Lessee: ________________________________________
16. Stamp Duty and Registration
This Agreement shall be duly stamped in accordance with the law applicable in the State or Union Territory where the Premises is situated. Where registration is compulsory, the Parties shall present the instrument for registration in accordance with the Registration Act, 1908 and applicable local rules. Stamp duty, registration fee and incidental expenses shall be borne by ________________________________________, unless the law provides otherwise.
17. Governing Law and Dispute Resolution
This Agreement shall be governed by the laws applicable in India and the State or Union Territory in which the Premises is situated. Subject to any mandatory forum or statutory remedy, disputes shall be subject to the jurisdiction of competent courts/tribunals at ________________________________________. Any agreed arbitration clause should be inserted only after the Parties decide the seat, venue, number of arbitrators and procedure.
18. Entire Agreement and Amendments
This Agreement records the understanding between the Parties concerning the lease of the Premises. Any amendment should be made in writing and, where required, duly stamped and registered.
19. Counterparts
This Agreement may be executed in counterparts. Each Party shall retain an executed copy. Where the law requires an original instrument for stamping, registration or evidentiary purposes, the Parties shall comply with that requirement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and place first stated above.
Name: ________________________
Name: ________________________
Name & Address: ________________________
Name & Address: ________________________
Relevant Legal Provisions
Transfer of Property Act, 1882
Section 105 - Lease defined: a lease of immovable property is a transfer of the right to enjoy the property for a certain time, express or implied, or in perpetuity, for consideration accepted on agreed terms. The transferor is the lessor, the transferee is the lessee, and the periodic consideration is rent.
Section 107 - Leases how made: leases that fall within the statutory category requiring a registered instrument must be made by registered instrument; other leases may be made in the manner permitted by the section, subject to applicable law and local amendments.
Section 108 - Rights and liabilities: unless a contract or local usage provides otherwise, the section supplies default rights and obligations between lessor and lessee, including disclosure of material defects, delivery of possession and quiet enjoyment, along with lessee obligations.
Registration Act, 1908
Section 17: compulsory registration applies, among other instruments, to leases of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent, subject to the Act's exceptions and valid State notifications or amendments.
Stamp Law
A lease instrument must be stamped according to the stamp law and State/Union Territory amendments applicable where the transaction is executed or the property is situated, as applicable. Registration and stamp duty are separate compliance questions.