Commercial lease agreement
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COMMERCIAL LEASE AGREEMENT
This Deed of Lease is made and executed at Place of execution on this Date of execution (hereinafter referred to as the "Date of Execution").
BETWEEN
Landlord name, son/daughter/wife of Landlord father/spouse name, aged about Landlord age years, residing at Landlord address, holding PAN Landlord PAN, hereinafter referred to as the "LESSOR" (which expression shall, unless repugnant to the context, include its/his/her heirs, executors, administrators, successors and permitted assigns) of the ONE PART;
AND
Tenant name, a company/LLP/firm/individual incorporated/registered/organised under the laws of India, having its registered office at Tenant registered address, holding PAN Tenant PAN, bearing GSTIN Tenant GSTIN, represented by Tenant representative name, Tenant representative designation, duly authorised vide board resolution/authorisation letter dated Authorisation date, hereinafter referred to as the "LESSEE" (which expression shall, unless repugnant to the context, include its successors-in-interest and permitted assigns) of the OTHER PART.
The Lessor and the Lessee are hereinafter individually referred to as a "Party" and collectively as the "Parties".
RECITALS
WHEREAS the Lessor is the absolute and lawful owner of the Scheduled Property described in the Schedule hereunder, having acquired good and marketable title thereto vide Title document description;
AND WHEREAS the Lessee is desirous of taking the Scheduled Property on lease for carrying on its lawful commercial business of Permitted business activity, and the Lessor has agreed to grant the lease on the terms and conditions hereinafter appearing;
NOW THEREFORE THIS DEED WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:
1.GRANT OF LEASE. In consideration of the rent hereinafter reserved and the covenants and conditions hereinafter contained, the Lessor hereby demises unto the Lessee the Scheduled Property, together with all fixtures, fittings and amenities described in the Second Schedule, TO HOLD the same unto the Lessee for a period of Lease term in years years commencing from Lease commencement date and ending on Lease expiry date (the "Term"), subject to renewal as provided in Clause 3.
2.RENT. (a) The Lessee shall pay to the Lessor monthly rent of Monthly rent amount (Rupees Monthly rent in words) plus applicable Goods and Services Tax under the CGST Act, 2017 and the applicable State GST Act, payable on or before the Rent payment day of month day of each calendar month, in advance, by electronic transfer to the Lessor's account detailed in the First Schedule.
(b)The rent for the first Years before first escalation years shall remain fixed, and thereafter shall stand enhanced by Escalation percentage% once every Escalation period years/months, commencing from First escalation date.
3.RENEWAL. The Lessee may seek renewal of the Term for a further period of Renewal term in years years by giving written notice not less than Renewal notice in months months before expiry of the Term, and the renewal shall be on mutually agreed terms, including rent determined by mutual agreement or, failing agreement, by market valuation by a registered valuer appointed jointly by the Parties, whose determination shall be final and binding.
4.SECURITY DEPOSIT. (a) The Lessee has paid/pays to the Lessor an interest-free refundable security deposit of Security deposit amount (Rupees Security deposit in words), being approximately Security deposit in months months' rent, against the punctual payment of rent and dues and the faithful performance of the covenants herein.
(b)The Lessor shall refund the security deposit, without interest but subject to deductions for arrears of rent, outgoings payable by the Lessee, damages beyond normal wear and tear, and costs of rectifying breaches, within Deposit refund days days of the Lessee handing over vacant and peaceful possession of the Scheduled Property on expiry or earlier termination.
(c)The Lessor shall not appropriate or adjust the deposit without first issuing a written statement of deductions to the Lessee, and any dispute shall be resolved under Clause 24.
5.PAYMENT OF OUTGOINGS. (a) The Lessor shall pay, during the continuance of this lease, all municipal taxes, property tax, cess and levies assessed on the Scheduled Property, together with any capital costs of structural repairs.
(b)The Lessee shall pay, during the Term, the charges for electricity, water, air-conditioning, common area maintenance, sanitation, and any other user-based charges in respect of the Scheduled Property as per the actual readings/bills, together with GST thereon.
6.USE OF THE PROPERTY. (a) The Lessee shall use the Scheduled Property solely for the business of Permitted business activity and for no other purpose, and shall comply with all applicable laws, including the applicable labour codes and statutes relating to safety, labour, employment and the environment, and shall obtain and maintain all licences, registrations and trade permits required for such use at its own cost.
(b)The Lessee shall not use or permit the use of the Scheduled Property for any illegal, immoral, hazardous or nuisance-creating activity, nor store hazardous or inflammable goods except with the Lessor's prior written consent and statutory clearances.
(c)The Lessee shall not change the nature of the permitted use without the prior written consent of the Lessor, which shall not be unreasonably withheld.
7.ALTERATIONS AND STRUCTURAL WORKS. The Lessee may, with the prior written consent of the Lessor (which shall not be unreasonably withheld), carry out internal, non-structural alterations and fit-outs at its own cost. No structural additions or alterations shall be made without such consent. At expiry or earlier termination, the Lessee shall, at the Lessor's option, either restore the Scheduled Property to its original condition (fair wear and tear excepted) or hand it over in its then condition, in which case no claim for compensation for the improvements shall lie against the Lessor.
8.REPAIRS AND MAINTENANCE. The Lessee shall keep the interior of the Scheduled Property, including all fixtures, in good and tenantable repair, fair wear and tear and damage by irresistible force excepted. The Lessor shall be responsible for structural and external repairs, including the roof, main walls, foundations, main drainage and common structure.
9.ASSIGNMENT AND SUB-LETTING. The Lessee shall not assign, sub-let, part with possession of, or share occupation of the Scheduled Property or any part thereof without the prior written consent of the Lessor. Permitted assignment to an affiliate of the Lessee (an entity holding more than Affiliate shareholding threshold% of the share capital of, or under common control with, the Lessee) shall not be refused if the affiliate assumes the Lessee's obligations in writing.
10.INSPECTION. The Lessor or its authorised representative may, upon Inspection notice hours hours' prior written notice and not more than once a month except in emergency, enter the Scheduled Property to inspect its state of repair and compliance with this lease, without unreasonably disturbing the Lessee's business.
11.LESSOR'S COVENANTS. The Lessor covenants with the Lessee that: (a) the Lessor has good title to the Scheduled Property and full power and authority to grant this lease; (b) the Lessee shall, on paying the rent and performing the covenants herein, peacefully hold and enjoy the Scheduled Property during the Term without interruption by the Lessor or any person claiming under the Lessor; (c) the Scheduled Property is free from encumbrances as on the Date of Execution, save as disclosed in the Third Schedule; and (d) upon request and payment of charges, the Lessor shall provide documents reasonably required by the Lessee for obtaining licences and registrations.
12.LESSEE'S COVENANTS. The Lessee covenants with the Lessor to: (a) pay the rent, GST and outgoings on the due dates; (b) keep insurance as required under Clause 13; (c) not cause nuisance or undue disturbance to other occupants or neighbours; (d) deliver up vacant and peaceful possession of the Scheduled Property on expiry or earlier determination in good repair; and (e) comply with the applicable labour codes and all other laws in respect of its employees and business at the Scheduled Property.
13.INSURANCE. (a) The Lessee shall obtain and maintain, at its cost, fire and allied perils insurance for the Scheduled Property for its full insurable value, and public liability insurance of not less than Public liability cover amount, keeping the Lessor's interest noted, throughout the Term.
(b)The Lessee shall insure its own stock, equipment and fittings. Neither Party shall be liable to the other for loss arising from uninsured risks to the extent provided by law.
14.FORCE MAJEURE. If either Party is prevented or delayed in performing its obligations by an event beyond its reasonable control, including fire, flood, earthquake, epidemic, pandemic, lockdown, war, act of terrorism or governmental order, that Party shall notify the other in writing within Force majeure notice days days, and its obligations (other than payment of accrued amounts) shall be suspended for the duration of the event. If the event continues for more than Force majeure termination days consecutive days, either Party may terminate this lease on written notice, without liability save for sums accrued prior to the event; the security deposit shall thereupon be refunded under Clause 4.
15.TERMINATION. (a) Either Party may terminate this lease after the expiry of Lock-in period in months months from the commencement date (the "Lock-in Period") by giving not less than Termination notice in months months' prior written notice to the other, or Rent in lieu of notice months months' rent in lieu of notice.
(b)The Lessor may terminate this lease forthwith by written notice if the Lessee: (i) fails to pay rent or any amount due within Rent default grace days days after written notice of default; (ii) commits a material breach of this lease and fails to remedy it within Breach cure period days days of written notice; (iii) becomes insolvent, or goes into liquidation except for solvent reconstruction; or (iv) uses the Scheduled Property for a purpose not permitted under Clause 6.
(c)During the Lock-in Period, neither Party shall terminate this lease except for a fundamental breach by the other, save that the Lessee may terminate on payment to the Lessor of Lock-in exit compensation months months' rent as compensation.
16.CONSEQUENCES OF TERMINATION. (a) On expiry or earlier termination, the Lessee shall remove its signage, fittings and movable property within Handover days after termination days and hand over vacant possession; any property left thereafter may be removed by the Lessor at the Lessee's cost after Abandoned property notice days days' written notice.
(b)If the Lessee fails to deliver possession on expiry or termination, the Lessee shall pay compensation at twice the then-prevailing monthly rent for the period of such unauthorised occupation, without prejudice to the Lessor's right to recover possession in accordance with law.
17.STAMP DUTY AND REGISTRATION. The stamp duty and registration fees on this Deed shall be borne by the Lessee unless otherwise agreed in writing. The Parties shall execute such further documents and do such acts, including presenting this Deed for registration under the Registration Act, 1908, as may be reasonably required to perfect the leasehold rights granted herein.
18.TAXES AND DEDUCTIONS. (a) The rent stated herein is exclusive of GST, which the Lessee shall pay in addition where the lease is taxable, and the Lessor shall issue a tax invoice compliant with the CGST Act, 2017.
(b)The Lessor shall furnish its PAN and, where applicable, GSTIN and a declaration of tax residency/ownership to enable the Lessee to discharge any withholding obligations under the Income-tax Act, 1961, and the Lessor alone shall be liable for its own income-tax on the rent.
19.NOTICES. Any notice under this Deed shall be in writing, in English, and delivered by hand, registered post with acknowledgment due, or email, to the addresses stated above or to such other address as a Party notifies in writing. A notice shall be deemed served on delivery (if by hand), on the Deemed service daysth day of posting (if by post), or on transmission of an acknowledgment of delivery (if by email).
20.RELATIONSHIP OF PARTIES. Nothing herein shall constitute the Parties as partners, joint venturers or agents of one another. The lease granted is a bare commercial lease and does not confer any equity or partnership interest in the Scheduled Property.
21.ENTIRE AGREEMENT AND AMENDMENT. This Deed supersedes all prior understandings between the Parties relating to the Scheduled Property and may be amended only by a written instrument signed by both Parties and duly stamped.
22.SEVERABILITY AND WAIVER. If any provision is held invalid, the remainder shall continue in force. No failure or delay in exercising a right shall operate as a waiver thereof.
23.GOVERNING LAW. This Deed shall be governed by and construed in accordance with the laws of India, and the Parties submit to the exclusive jurisdiction as provided in Clause 24.
24.ARBITRATION AND DISPUTE RESOLUTION. (a) Any dispute or difference arising out of or in connection with this Deed, including as to its existence, validity or termination, shall first be attempted to be resolved by good-faith negotiation between authorised representatives within Negotiation period days days of a written notice of dispute.
(b)Failing resolution, the dispute shall be finally resolved by arbitration under the Arbitration and Conciliation Act, 1996, by a sole arbitrator appointed by mutual consent of the Parties, or failing such consent within Arbitrator appointment days days, appointed in accordance with the said Act. The seat and venue of arbitration shall be Arbitration seat, and the language shall be English.
(c)The award shall be final and binding. The costs of arbitration shall initially be borne equally and finally awarded by the arbitrator. Subject to Clause 24, the courts at Exclusive jurisdiction city shall have exclusive jurisdiction.
25.STAMPED COVENANTS. Each Party shall bear its own costs of negotiation and execution except as provided in Clause 17.
26.COUNTERPARTS. This Deed may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.
IN WITNESS WHEREOF
the Parties have caused this Deed to be executed on the day, month and year first above written.
| Lessor | Lessee |
|---|---|
| Signed and delivered by the withinnamed Lessor | Signed and delivered by the withinnamed Lessee |
| Landlord name | For Tenant name |
| Signature: | Signature: |
| Witness 1 name, Witness 1 address, Witness 1 signature | Witness 2 name, Witness 2 address, Witness 2 signature |
THE FIRST SCHEDULE
| Lessor's bank account | Landlord bank name, A/c No. Landlord account number, IFSC Landlord IFSC code |
|---|
THE SECOND SCHEDULE — FIXTURES AND AMENITIES LET
•Fixture item 1
•Fixture item 2
•Fixture item 3
THE THIRD SCHEDULE — DISCLOSURES AND ENCUMBRANCES
•Encumbrance or "Nil"
•Other disclosures or "Nil"
THE SCHEDULED PROPERTY
All that premises known as Property description, situated at Property address, admeasuring Property area, within the limits of Municipality or authority, and more particularly described in the title documents stated in the Recitals.
Landlord name — LessorTenant name — Lessee
Landlord signature dateTenant signature date