The Essentials of an Indian Lease Deed

• Property Description: The lease document should include information about the property, such as the area, location, address, structure, furnishings and fixtures, and so on.
• Time period: The lease document should specify the length of time the agreement will be in effect. If both parties agree to continue and renew the lease, this provision might also include details about the renewal of the lease deed.
• Rent, Maintenance, and Security: The agreement should spell out the rent amount, payment method, due dates, security deposit, and interest for late payments, among other things. If necessary, it should also include information and responsibility for paying any maintenance fees, utility bills, society fees, and so forth.
• Lease Termination: The lease document should include the grounds for terminating the agreement, such as breach of the lease deed, illegal use of the property, failure to pay rent, annoyance by the tenant, and so on.
• Subletting: The agreement should include whether or not the renter is allowed to sublease the property.
• Dispute Resolution: It should state the mechanism for resolving legal problems between the landlord and the tenant. Disputes can emerge as a result of agreement breaches and can be resolved through alternative dispute resolution (ADR) mechanisms such as arbitration.
• Applicable Rules: This section specifies the laws that apply to both the owner and the renter in the event of a dispute. It also specifies which court has authority over such cases.

Both residential and business leases can employ the above-mentioned lease deed structure. A corporate rent agreement, on the other hand, should include information about the business, indemnification, and so on. Feelium E-contract can assist you in personalizing a ready-to-use template for your business and residential lease deed needs. The lease deed must then be registered with the Registrar or Sub-Registrar of the district where the property is located after it has been drafted. After paying the required stamp duty, which varies by state, it is registered. For example, in Delhi, a lease deed is registered by paying stamp duty of 2% of the average annual rent for leases up to 5 years and 3% of the average annual rent for leases up to 10 years.

Required Documents for Registration

You all need the following papers to register a home lease deed:

• Stamp paper
• lease deed
• Registration fees have been received.

The following documents are necessary to register a business lease deed:

• On firm letterhead, a power of attorney/board resolution
• An Aadhaar Card, Driver's License, Passport, and other forms of identification are acceptable.
• Proof of the authorized signatory's address
• Proof of the authorized signatory's address
• PAN Card for the company
• Authorized signatorys company seal/stamp

Leases of Various Types

Leases vary greatly, however, there are few that are often used in the real estate industry. The form of a lease is impacted by the lessor's preferences as well as market developments. Some leases shift the responsibility to the renter, while others shift it entirely to the property owner. That's not all; there are plenty other sorts in between. The following are the most prevalent types of tenancy agreements.

Absolute Net Lease

The tenant bears the whole burden of an absolute net lease, including insurance, taxes, and upkeep. The absolute type is frequent in single-tenant systems when the landlord constructs dwelling units to meet the demands of a renter. The proprietor hands over the finished apartment to the renter for a certain period of time.

In such cases, the renters are often huge corporations that understand the conditions of the contract and are willing to absorb the costs. However, because the renter bears the majority of the burden, property owners typically accept lower monthly fees.

Triple Net Lease

The triple net lease is related with three expenditure categories: insurance, maintenance, and real estate taxes. These expenditures are also known as pass-through or operating expenses since the property owner passed them all on to the renter as rent excesses. Excessive costs include taxes, insurance, and common area fees, to name a few (TICAM).

In single-tenant and multi-tenant rental flats, triple net agreements, often known as NNN agreements, are the standard. A single-tenant lease gives the tenant control over landscaping and outside maintenance. In summary, the tenant is responsible for the look of the property throughout the lease.

A multi-tenant arrangement allows the property owner complete control over the look of the property. In this manner, no tenant may detract from the overall aesthetic of a building. Furthermore, under a multi-tenant agreement, the tenant is required to pay a regular pro-rata share of operational expenditures.

As a result, renters are granted the ability to audit the building's operational expenditures. The property owner is not permitted to hire a janitor under a triple net lease. Each tenant contributes to the costs of cleaning and interior upkeep.

Modified Gross Lease

The property owner bears the whole burden under the modified gross lease. According to the conditions, the owner is responsible for all insurance, property taxes, and common area upkeep. The tenant, on the other hand, is responsible for cleaning, utility, and interior maintenance expenditures.

The lease agreement also states that the owner is responsible for the roof and other structural components of the building. However, because the owner bears a major amount of the tenancy's expenditures, the monthly rates are greater than for other forms of tenancies.

The tenant benefits from the modified lease form since the owner assumes related risks such as running expenditures. The tenant's prices remain consistent throughout the year, and he has no say in the property's operations. Unfortunately, the owner may decide to impose a monthly fee to cover the expense of operating the building.

Full-Service Lease

The full-service lease, as the name implies, covers the majority of the costs associated with running a facility. However, there are a few exclusions, such as data and phone charges.

Otherwise, the property owner is responsible for the remaining expenditures, which include common area upkeep, taxes, interior, insurance, utility, and cleaning charges. As a result, the monthly cost is slightly higher, and such leases are prevalent in large multi-tenant apartments where partitioning a building into smaller rooms is impracticable.

Such an arrangement is favourable to the renter because there are no additional charges in addition to the standard monthly rate. The owner may elect to charge a little premium on top of the monthly payment to cover the expense of the tenancy. The majority of owners choose the full-service arrangement since it gives them complete control over the overall aesthetic of their facility.