Lease Deed Format

A lease deed is a crucial legal document that outlines the terms and conditions under which a property is leased from one party (lessor) to another (lessee). In India, a well-drafted lease deed not only safeguards the interests of both parties but also ensures compliance with the legal framework governing property leases. 

Lease Deed Format: Sample

LEASE DEED

THIS DEED OF LEASE made on this ____________________ day of ________ 20 __ at ______________ between

_____________________________ residing at

hereinafter referred to as the “Lessor” (which term shall mean and include wherever the context so requires or admits his/their heirs, successors, administrators, executors, attorneys and assigns) of the One part;

AND

__________________ BANK, a body corporate, ____________________ hereinafter referred to as the “Lessee” (which term shall mean and include wherever the context admits or requires its successors, administrators and assigns) of the Other Part, represented by its Manager and holder of Power of Attorney dated ______________, Sri _________________________, S/o. ________________________ witnesseth as follows:

WHEREAS, the Lessor/s is/are the owner(s) of the building bearing No. __________________ situated at _____________________________________, which is declared to be valued at Rs. _________ by him/them.

• WHEREAS, the Ground floor/First floor/Second floor, measuring about _____________ sq.ft. (Carpet area) in the said building, more fully described in the schedule hereto and hereinafter called the “Said Premises,” was/were vacant and ready for occupation. The Lessee, being in need of accommodation for its use and occupation, approached and requested the Lessor/s to grant a lease in its favour in respect of the “Said Premises,” and both parties now desire to reduce the terms into writing. The Lessor/s agreed to grant the lease in favour of the Lessee in respect of the “Said Premises.” It is now hereby agreed as follows:

OR

WHEREAS, the Lessee is already a tenant under the Lessor/s in respect of the above building, fully described in the schedule hereto and hereinafter called the “Said Premises,” paying a monthly rental of Rs. __________. The Lessor approached and requested the Lessee to pay an enhanced rental of Rs. _______________ and the Lessee consented to pay the enhanced rental of Rs. _____________. Both parties now desire to reduce the terms into writing. It is now hereby agreed as follows:

1. This lease, for the purposes of payment of rent and period of lease, shall be deemed to have commenced from ___________.
2. This lease shall be in force for a period of _____ years certain from ___________. The Lessee shall, however, have the option to continue the lease thereafter for a further period up to __________ years. The Lessee shall be at liberty to vacate the “Said Premises or part thereof” at any time during the period of lease on giving ________ month/s notice.
3. The Lessee shall pay to the Lessor/s in respect of the “said premises” a monthly rental of Rs. __________ (Rupees _____________________________________________ only) for the certain period of lease and a monthly rental of Rs. __________ for the option period of lease, payable within the fifth working day of each succeeding calendar month.
4. The Lessee has paid to the Lessor/s a sum of Rs. _________ only, being ___________ month/s rent in respect of the “said premises” as deposit of rent to be adjusted towards the rent for the last ____________ month/s of the tenancy.
5. The payment of all taxes, rates, cess and other levies, including penalties, if any, charged thereon in respect of the “said premises,” such as Corporation/Municipal/Panchayat Tax, Urban Land Tax, etc., due to the State Government, Central Government or other local or civic authorities, including enhancements and new introductions, shall be to the account of the Lessor. The Lessee shall be at liberty to pay the above tax, rate or cess or other levy including penalties, if any, charged thereon in case of default or delay by the Lessor and adjust the amount so paid together, with interest and other incidental expenses from out of rents in respect of the “said premises” becoming due immediately after the said payment or demand reimbursement of all such amounts, costs, expenses, etc., with interest @ ________ % per annum from the date of such payments until realisation by the Lessee. Service tax (if applicable) will also be borne and paid by the Lessor (landlord).
6. The Lessor shall, at his/their own cost, carry out all repairs including periodical painting of the “said premises.” The periodicity of such painting will be once in 3-5 years. If the Lessor fails to carry out such repairs, including periodical whitewashing and painting, the Lessee may call upon the Lessor in writing to do the same within one month from the date of receipt of such request. If the Lessor fails to carry out the same within that time, the Lessee shall be at liberty to get it done and adjust the amount spent or expended on such repairs, etc., with interest @ _______ % per annum towards the rent payable to the Lessor or the Lessee shall have the right to recover the same from the Lessor.
7. The Lessee shall be at liberty to under-lease/sub-lease the “said premises” or part thereof to any of its subsidiaries or to any other party.
8. The Lessee shall have the right to utilise the leased premises or part thereof for any of their various needs.
9. The Lessor shall grant all rights of way, water, air, light and privy and other easements appertaining to the “said premises.”
10. The Lessor has no objection to the Lessee installing exclusive generator sets for the use of the Office, whether such generator sets are owned by the Lessee or taken on hire by a Third Party for the exclusive use of the Lessee. Further, the Lessor agrees to provide suitable space with proper enclosures for the installation of the generator set free of cost.
11. The Lessee shall have exclusive rights to the parking space for parking the vehicles of staff members and customers of the Lessee and the same shall not be disturbed, obstructed or encroached upon in any manner by any persons whatsoever.
12. The Lessee shall have the absolute & exclusive right to use the entire space in the “said premises” both outside and inside for making full use of frontages and the side walls in displaying the Lessee’s signboards/advertisements without any additional charges to the exclusion of third parties. If anybody causes any intrusion, trespass or encroachment restricting the peaceful enjoyment of the Lessee over the space which is specifically meant for usage of the Lessee, the Lessor on receipt of such Notice from the Lessee shall take all possible legal actions against such violations, including criminal action, if necessary. If the Lessor fails to take legal recourse to remove such intrusions, trespass or encroachments within one month from the date of receipt of such Notice from the Lessee, the Lessee shall be at liberty to take legal action against the violators and recover the cost/expenses incurred for such removal out of the rent payable to the Lessor or from any other monies payable to the Lessor.
13. The Lessor has no objection to the Lessee installing an ATM in the said premises at any time without any additional rent to the Lessor. The ATM room will be constructed by the Lessor at his cost and the Lessor will provide the required additional power to the Lessee.
14. The First Party has no objection to the Second Party installing a V-SAT antenna in the said premises at any time without additional rent (free of cost) to the First Party.
15. The Lessee shall have the right to remove at the time of vacating the “said premises” all electrical fittings and fixtures, counters, safes, strong room doors, safe deposit lockers, partitions and all other furniture put up by it.
16. The Lessee shall be liable to pay all charges for electricity and water actually consumed by the Lessee during the occupation and calculated as per the readings recorded by the respective meters installed in the “said premises.”
17. The Lessee shall not make any structural alterations to the building without the information and permission of the Lessor. However, the Lessee is at liberty and no permission of the Lessor is required for fixing wooden partitions, cabins, counters, false ceiling and other office furniture, fixtures, electrical fittings, air-conditioners, exhaust fans and other fittings and office gensets, etc., as per the needs and requirements of the Lessee and/or make such other additions and alterations on the premises which will not affect the permanent structure.
18. The Lessor may at their own cost and expense construct any additional structure/additional floor in the building. In such a case, if the Lessor decides to lease out the said additional floors/area, then the first option and offer will be given to the Lessee, who shall have the right to take the same on lease on mutually acceptable terms. In case of refusal by the Lessee, the Lessor will be at liberty to lease out the same to any other party.
19. The Lessee shall hand over possession of the “said premises” to the Lessor on the expiry of the period of lease fixed herein or on the expiry of the period of option should the Lessee avail itself of the same and on refund of the deposit made by the Lessee, if any, in the same state and condition as on the date of occupation but subject to natural wear and tear due to ordinary use and lapse of time.

SCHEDULE OF THE PROPERTY (Here enter the boundaries and other details of the premises leased out).

In witness whereof the parties hereto have set their hands hereunto in full agreement of the

terms and conditions set forth herein above the day and year hereinbefore first mentioned.

WITNESSES

(1).

(2).

LESSOR/S

LESSEE

*This paragraph is applicable only when acquiring premises on a fresh lease. Please delete the immediately succeeding paragraph pertaining to the renewal of the lease.

** This paragraph is applicable only when renewing the lease. Please delete the immediately preceding paragraph, which pertains to the fresh lease.

Element of Lease Deed

1. Introduction: Setting the Stage

The lease deed begins with an introduction that sets the context for the agreement. It typically includes:

• Date: The exact date when the lease deed is being executed.
• Day: Mention the day of the week, which adds to the formality and specificity of the document.
• Place: The location where the deed is being signed.

This section establishes the timeline and location, ensuring that all parties are aware of when and where the agreement was formalised.

2. Parties Involved: Clearly Identifying the Participants

The next crucial element is the identification of the parties involved in the lease deed:

• Lessor Details: Full name, age, father’s name, occupation and place of residence of the person or entity leasing out the property.
• Lessee Details: Full name, age, father’s name, occupation and place of residence of the person or entity taking the lease.

This section must clearly identify the legal identities of both parties to avoid any future disputes or ambiguities.

3. Property Details: Defining the Leased Asset

The lease deed should contain a comprehensive description of the property being leased:

• Size: Mention the exact dimensions of the property, typically in square feet or square meters.
• Location: Provide the full address of the property, including any landmarks for easy identification.
• Registration Particulars: Include details of the property’s registration, such as the registration number and office.
• Description of Structures: If there are any existing buildings or structures on the property, describe them in detail.
• Additional Information: Any other relevant details, such as the type of property (residential, commercial, etc.), should be included.

This section ensures that both parties have a clear understanding of the exact property being leased.

4. Lease Term: Defining the Duration

The lease term specifies the duration for which the property is being leased:

• Start Date: The date on which the lease begins.
• End Date: The date on which the lease will expire.
• Renewal Option: Mention if there is an option to renew the lease after the initial term and under what conditions.

Clearly stating the lease term helps both parties plan accordingly and avoids misunderstandings regarding the duration of the lease.

5. Consideration or Rent: Financial Terms

This section outlines the financial aspects of the lease:

• Rent Amount: The amount of rent to be paid by the lessee, usually on a monthly basis.
• Payment Dates: The specific dates on which rent is to be paid.
• Payment Methods: Accepted methods of payment (e.g., bank transfer, cheque).
• Rent Increases: Provisions for periodic rent increases, if applicable.
• Security Deposit: The amount of security deposit required, its purpose and the conditions for its return.

Detailing the financial terms ensures transparency and helps prevent disputes related to payments.

6. Utility and Maintenance Charges and Taxes: Allocation of Expenses

The lease deed should specify who is responsible for paying various charges:

• Utility Bills: Responsibility for water, electricity, gas, telephone and internet bills.
• Maintenance Charges: Who will bear the cost of maintaining the property.
• Taxes: Specify which party is responsible for property taxes and other government levies.

Clearly defining these responsibilities ensures that both parties are aware of their financial obligations beyond the rent.

7. Rights and Duties: Obligations of Both Parties

This section outlines the rights and responsibilities of the lessor and lessee:

• Lessor’s Rights: The right to inspect the property during reasonable hours with prior notice.
• Lessee’s Duties: The obligation to maintain the property in good condition and use it for the agreed purpose.

This section helps in setting expectations and preventing misuse or neglect of the property.

8. Lease Termination: Conditions for Ending the Lease

Lease termination clauses are crucial to define how and when the lease can be ended:

• Termination Date: The specific date when the lease will automatically end unless renewed.
• Grounds for Termination: Conditions under which the lease can be terminated prematurely, such as breach of terms, non-payment of rent or illegal activities.
• Possession Return: The process and condition in which the lessee should return the property.

Clearly stating the termination conditions helps avoid legal disputes at the end of the lease term.

9. Sub-Letting: Rules for Sub-Leasing

If sub-letting is allowed, this section should clearly outline the conditions:

• Permission: Whether the lessee is allowed to sub-let the property.
• Approval: Requirement for obtaining written consent from the lessor before sub-letting.

This clause helps in controlling who occupies the property during the lease term.

10. Legal Charges: Allocation of Costs

This section details who will bear the legal expenses related to the lease:

• Stamp Duty: Responsibility for paying the stamp duty, which is required for registering the lease deed.
• Registration Fees: Payment of registration fees and other government levies.
• Shared Costs: If the costs are to be shared, clearly state the percentage each party will bear.

Defining the allocation of legal costs upfront avoids disputes when it’s time to register the deed.

11. Jurisdiction: Legal Venue for Disputes

Jurisdiction clauses specify the legal framework governing the lease:

• Applicable Law: The laws of the state or country under which the lease will be governed.
• Court Jurisdiction: The specific courts that will have jurisdiction over any disputes arising from the lease.

This clause provides clarity on how legal issues will be handled, should they arise.

12. Indemnity: Protecting Against Losses

An indemnity clause is essential to protect against potential losses or damages:

• Indemnity Clause: A clause stating that the lessee will indemnify the lessor against any losses, damages or legal issues arising from the lessee’s use of the property.

Including an indemnity clause adds an extra layer of protection for the lessor.

13. Renewal: Extending the Lease

If there is a possibility of renewing the lease, this section should outline the terms:

• Renewal Period: The duration for which the lease can be renewed.
• Alterations: Any changes to the rent or other terms that will apply during the renewal period.

Clearly stating the renewal conditions helps both parties plan for the future.

Conclusion

A well-drafted lease deed is a fundamental document that ensures the smooth leasing of property while protecting the interests of both the lessor and lessee. By carefully outlining the terms and conditions, parties can avoid misunderstandings and potential legal disputes. It is advisable to seek legal counsel when drafting a lease deed to ensure compliance with local laws and regulations.

This comprehensive guide covers all the essential elements required in a lease deed format, tailored to the Indian context. By adhering to this format, you can ensure that your lease deed is legally sound and provides clear protection for all parties involved.