Commercial Lease Agreement Template India

COMMERCIAL LEASE AGREEMENT TEMPLATE INDIA

1. DOCUMENT PREAMBLE & RECITALS

THIS COMMERCIAL LEASE AGREEMENT (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and between:

LESSOR: [Full Legal Name of Lessor / Entity], having its registered office/residence at [Lessor's Complete Address] (hereinafter referred to as the "Lessor", which expression shall unless repugnant to the context include its successors, legal representatives, and permitted assigns) of the FIRST PART;

AND

LESSEE: [Full Legal Name of Lessee / Entity], a company incorporated under the Companies Act, [1956/2013] / proprietorship / partnership, having its registered office at [Lessee's Complete Address] (hereinafter referred to as the "Lessee", which expression shall unless repugnant to the context include its successors, legal representatives, and permitted assigns) of the SECOND PART.

(The Lessor and Lessee are hereinafter collectively referred to as the "Parties" and individually as a "Party").

RECITALS:

WHEREAS: A. The Lessor is the absolute legal and beneficial owner of, and/or has the lawful authority to lease out, the commercial property bearing municipal/postal address [Complete Property Address, Floor, Building Name] admeasuring approximately [Number] square feet of Carpet Area / Built-up Area (hereinafter referred to as the "Scheduled Premises"); B. The Lessee has represented that it requires the Scheduled Premises for commercial use, specifically for [Specify Business Purpose, e.g., IT Enabled Services / Corporate Office / Retail Store], and has approached the Lessor for the same; C. The Lessor has agreed to grant a lease of the Scheduled Premises to the Lessee, and the Lessee has agreed to take on lease the Scheduled Premises, subject to the terms, covenants, conditions, and stipulations hereinafter contained.

NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, the following terms shall have the meanings ascribed to them below, unless the context otherwise requires:

1. "Applicable Law" means any and all statutes, enactments, acts of legislature or parliament, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directions, directives, and orders of any government, statutory authority, tribunal, board, or court in India.
2. "Business Day" means a day (other than a Saturday, Sunday, or public holiday declared under the Negotiable Instruments Act, 1881) on which scheduled commercial banks are open for normal banking business in [Name of City/Jurisdiction, e.g., Mumbai].
3. "Interest-Free Refundable Security Deposit" means the interest-free security deposit amount detailed in Section 3, payable by the Lessee to the Lessor for the due observance and performance of the terms of this Agreement.
4. "Lock-in Period" means the initial period of [Number] months/years from the Lease Commencement Date during which neither Party can terminate this Agreement without the consequence of penalty as specified herein.
5. "Lease Term" means the total duration of the lease granted under this Agreement, commencing from [Start Date] and expiring on [End Date], unless terminated earlier in accordance with the provisions hereof.
6. "Monthly Rent" means the monthly compensation payable by the Lessee to the Lessor for the use and occupation of the Scheduled Premises, as stipulated in Section 3.
7. "Scheduled Premises" means the commercial real estate unit more particularly described in the Preamble, including all fixtures, fittings, electrical installations, and amenities specified in the inventory annexed hereto.
8. "Taxes" means all applicable central, state, and local municipal taxes, cesses, levies, and Goods and Services Tax (GST), property tax, and any other statutory impositions levied on the rental income or the Scheduled Premises.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Grant of Lease and Term

The Lessor hereby demises and grants unto the Lessee the lease of the Scheduled Premises for the Lease Term commencing from [Lease Commencement Date] and ending on [Lease Expiration Date], with an option to renew for a further period of [Number] years upon mutually agreed terms, subject to an escalation of [Percentage]% on the last paid Monthly Rent.

3.2 Rent and Payment Mechanics

1. Monthly Rent: The Lessee shall pay to the Lessor a Monthly Rent of [Currency and Amount] (exclusive/inclusive of GST) payable in advance on or before the [Day, e.g., 7th] day of each calendar month.
2. Mode of Payment: All payments under this Agreement shall be made via electronic wire transfer (NEFT/RTGS) to the designated bank account of the Lessor.
3. Tax Deducted at Source (TDS): The Lessee shall deduct TDS at the prevailing statutory rates under the Income Tax Act, 1961, and shall issue Form 16A to the Lessor within the statutory timelines.

3.3 Security Deposit

1. Upon the execution of this Agreement, the Lessee shall deposit with the Lessor an amount of [Currency and Amount], equivalent to [Number] months' Rent, as an Interest-Free Refundable Security Deposit.
2. The Security Deposit shall not carry any interest and shall be refunded to the Lessee simultaneously with the vacant and peaceful handing over of the Scheduled Premises upon the expiration or early termination of this Agreement, subject to deductions for unpaid rent, utility bills, or material damages beyond normal wear and tear.

3.4 Utilities and Maintenance Charges

1. The Lessee shall independently bear and pay all charges for electricity, water, internet, and other utilities consumed in the Scheduled Premises based on sub-meter readings or actual bills raised by the utility providers.
2. The Lessee shall pay common area maintenance (CAM) charges amounting to [Currency and Amount] per square foot directly to the Lessor/Facility Management Agency on a monthly basis.

3.5 Representations and Warranties of the Lessor

The Lessor represents and warrants that:

1. It has absolute, clear, and marketable title to the Scheduled Premises and possesses full legal capacity and unencumbered authority to lease the same.
2. The Scheduled Premises is structurally sound, free from any structural defects, and has all necessary municipal and statutory clearances for commercial occupation.
3. The peaceful possession and quiet enjoyment of the Scheduled Premises by the Lessee shall not be disturbed by the Lessor or any person claiming through or under it.

3.6 Representations and Covenants of the Lessee

The Lessee covenants that:

1. It shall use the Scheduled Premises strictly for lawful commercial purposes and not for any hazardous, illegal, or obnoxious activities.
2. It shall not make any structural alterations, additions, or permanent changes to the Scheduled Premises without the prior written consent of the Lessor.
3. It shall comply with all Applicable Laws, municipal regulations, and fire safety norms applicable to its business operations within the Scheduled Premises.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

The occurrence of any of the following events shall constitute a material breach and "Event of Default" under this Agreement:

1. Failure by the Lessee to pay the Monthly Rent, CAM charges, or any other dues within [Number, e.g., 15] days of the due date.
2. Breach by either Party of any material representation, warranty, or covenant contained herein.
3. Initiation of corporate insolvency resolution proceedings, liquidation, winding up, or bankruptcy proceedings against either Party.
4. Sub-letting, assigning, or parting with possession of the Scheduled Premises in violation of the terms of this Agreement.

4.2 Notice and Cure Period

Upon the occurrence of an Event of Default, the non-defaulting Party shall issue a written notice of default to the defaulting Party. The defaulting Party shall have a period of thirty (30) Business Days from the receipt of such notice to cure the specified default (the "Cure Period").

4.3 Termination Rights

1. Termination for Cause: If the defaulting Party fails to cure the default within the Cure Period, the non-defaulting Party may terminate this Agreement immediately by delivering a written notice of termination.
2. Termination for Convenience (Post Lock-in): After the expiry of the Lock-in Period of [Number] months, either Party may terminate this Agreement by giving a prior written notice of [Number, e.g., 90] days to the other Party, or payment of rent in lieu thereof.
3. Consequences of Termination: Upon termination or expiration of this Agreement, the Lessee shall immediately hand over vacant, peaceful, and unencumbered possession of the Scheduled Premises to the Lessor along with all keys and original fixtures in good working condition, reasonable wear and tear excepted.

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5. BOILERPLATE LEGAL PROVISIONS

5.1 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court or tribunal of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions shall remain in full force and effect.

5.2 Entire Agreement

This Agreement, including any schedules and annexures attached hereto, constitutes the entire understanding and agreement between the Parties with respect to the subject matter hereof and supersedes all prior oral or written negotiations, representations, understandings, or agreements.

5.3 Force Majeure

Neither Party shall be liable for any failure or delay in performance under this Agreement due to causes beyond its reasonable control, including acts of God, war, strikes, lockouts, civil commotion, pandemic, acts of government, or natural disasters ("Force Majeure Event"). The affected Party shall promptly notify the other Party in writing. If a Force Majeure Event continues for a continuous period exceeding sixty (60) days, either Party may terminate this Agreement by written notice without liability.

5.4 Governing Law and Jurisdiction

This Agreement shall be governed by, construed, and enforced in accordance with the laws of India. Subject to the arbitration clause below, the courts located at [City/Jurisdiction] shall have exclusive jurisdiction over all matters arising out of or in connection with this Agreement.

5.5 Dispute Resolution and Arbitration

1. Any dispute, controversy, or claim arising out of or relating to this Agreement, including its formation, interpretation, breach, or termination, shall be settled amicably through good-faith negotiations between the senior management of the Parties within thirty (30) days of a dispute notice.
2. If the dispute remains unresolved, it shall be referred to binding arbitration to be conducted by a sole arbitrator appointed mutually by the Parties. The arbitration proceedings shall be conducted in English in accordance with the Arbitration and Conciliation Act, 1996. The seat and venue of arbitration shall be [City, India], and the award rendered shall be final and binding on the Parties.

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have executed this Commercial Lease Agreement through their duly authorized representatives as of the Effective Date first written above.

FOR AND ON BEHALF OF THE LESSOR:

[Lessor Entity Name]

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Name: [Signatory Name]
Title: [Signatory Designation / Director / Partner]
Date: [Date]

Witness 1:
Signature: _______________________________
Name: [Witness Name]
Address: [Witness Address]

FOR AND ON BEHALF OF THE LESSEE:

[Lessee Entity Name]

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Name: [Signatory Name]
Title: [Signatory Designation / Director / Partner]
Date: [Date]

Witness 2:
Signature: _______________________________
Name: [Witness Name]
Address: [Witness Address]