Commercial Lease Agreement Template (India) — Free Format
A commercial lease agreement grants a business the right to occupy office, retail or warehouse space for rent over a longer term, usually three to nine years with escalations and lock-in. Leases over one year must be registered, so plan for stamp duty and registration from the start.
Stamp, registration and e-sign at a glance
The three things to settle before anyone signs this agreement in India.
Payable under the stamp law of the state where it is signed; rates vary by state. Unstamped, it cannot be used as evidence until duty and penalty are paid. Duty on leases is typically a percentage of average annual rent plus deposit and varies widely.
Check your state's rateMandatory for leases of more than one year.
Leases are not listed in the IT Act's First Schedule, but a registrable lease must be presented for registration under state procedures, which commonly require physical or state-authorised e-signatures. Check the sub-registrar's process before signing electronically.
What cannot be e-signedWhat is a Commercial Lease?
A commercial lease covers rent and escalation, security deposit, lock-in, fit-outs, maintenance charges, permitted use, signage, renewal options and exit. Because it transfers an interest in immovable property for more than a year, it is a registrable document.
When to use it
- Leasing an office, shop, showroom or warehouse
- Taking space in a business park with fit-out works
- Renewing a lease at revised rent and term
Key clauses checklist
Make sure your draft covers each of these. Linked clauses open a sample wording with drafting tips.
- Rent, escalation and GST Sample clause
- Security deposit
- Lock-in and termination Sample clause
- Fit-outs and reinstatement
- Assignment and sub-letting Sample clause
- Stamp duty and registration Sample clause
- Force majeure Sample clause
Indian law notes
Registration
A lease of immovable property for more than one year must be registered under Section 17 of the Registration Act, 1908. An unregistered registrable lease cannot be used to prove the lease terms, although it may be used for collateral purposes.
GST on rent
Renting commercial property is a taxable supply under GST. State that rent is exclusive of GST and that the landlord will issue tax invoices.
Transfer of Property Act
Where the lease is silent, Sections 105 to 117 of the Transfer of Property Act, 1882 fill gaps on repairs, notice and termination.
LEASE DEED (COMMERCIAL) This Lease Deed is executed at [City] on [Date] between: [Lessor Name], [address/registered office] (the "Lessor"); and [Lessee Name], [address/registered office] (the "Lessee"). 1. PREMISES The Lessor leases to the Lessee the premises at [Address], admeasuring [Area] sq. ft. [carpet / super built-up], with [number] car parks (the "Premises"), as shown in the plan in Schedule 1. 2. TERM The lease is for [9] years from [Start Date], with a lock-in of [3] years for both parties. The Lessee may renew for a further [3] years by notice at least [6] months before expiry, on terms to be agreed. 3. RENT 3.1 Monthly rent: Rs. [Amount], plus GST, payable in advance by the [7th] of each month. 3.2 Rent shall increase by [15]% every [3] years. 3.3 Rent-free period for fit-outs: [60] days from handover. 4. SECURITY DEPOSIT The Lessee has paid an interest-free refundable deposit of Rs. [Amount], equal to [6] months' rent, refundable on handover after lawful deductions, failing which the Lessor shall pay interest at [12]% per year on the delayed amount. 5. MAINTENANCE AND OUTGOINGS Common area maintenance charges are payable by the Lessee at actuals. Property tax is payable by the Lessor. Electricity and utilities are payable by the Lessee. 6. USE AND FIT-OUTS The Lessee shall use the Premises for [office / retail] use, may carry out non-structural fit-outs with the Lessor's approval (not unreasonably withheld), and may remove its movable fit-outs at the end of the term. 7. REPAIRS Structural repairs and building systems are the Lessor's responsibility. Internal day-to-day repairs are the Lessee's responsibility. 8. ASSIGNMENT The Lessee may not assign or sub-let without the Lessor's consent, except to a group company with notice. 9. TERMINATION After the lock-in, the Lessee may terminate on [6] months' notice. Either party may terminate for a material breach not cured within [30] days of notice. If the Premises become unusable through a force majeure event for more than [30] days, rent abates and either party may terminate. 10. STAMP DUTY AND REGISTRATION Stamp duty and registration charges shall be borne by [the Lessee / equally]. Both parties shall appear before the Sub-Registrar to register this deed. 11. GOVERNING LAW This deed is governed by the laws of India and the courts at [City] have jurisdiction. Schedule 1 – Description and plan of the Premises Lessor: ____________ Lessee: ____________ Witnesses: 1. ____________ 2. ____________
Replace every [placeholder] and delete options that do not apply. Estimate stamp duty with the stamp duty calculator
How to execute it
From blank template to a signed, stamped and stored contract.
Agree rent, escalation, lock-in and deposit in a term sheet first.
Calculate stamp duty and registration fees for the state.
Draft the lease deed on stamp paper or with e-stamping.
Book a sub-registrar appointment and register within the statutory time.
Diarise lock-in end, escalation dates and renewal notice dates.
Frequently asked questions
Does a commercial lease need to be registered?
Yes, if it is for more than one year. Unregistered, it cannot be relied on to prove its terms in court.
Is GST payable on commercial rent?
Yes. Renting commercial property is a taxable supply, and the landlord charges GST if registered.
Who pays stamp duty on a lease?
It is a matter of agreement. Commonly the lessee pays, or both share it equally.
Related templates
Stop emailing Word files around
Turn this format into an approved template, collect approvals, buy e-stamp paper, send it for Aadhaar eSign and get reminded before it renews.