A Lease Deed is a written contract between a landlord (lessor) and tenant (lessee), which lays down the prescribed terms and conditions under which a property is leased out by the lessor to lessee. Lease deed contains information about the tenure of lease, lease payments payable, deposits to be made and other terms to be followed by lessor and lessee during the lease term. The lease deed or agreement does not provide ownership rights to the lessee. However, the lessor may grant permission to the lessee to make necessary modification in the property to suit his purposes. Lease agreements may be executed for lease of immovable properties, vehicles, machineries and equipments etc.
Once the lease deed is drafted, it must be registered with the Registrar or Sub-Registrar of the district in which it is located. A lease deed is registered after paying the requisite stamp duty, which differs from state to state
Key components of a Lease Deed:-
Generally, the following provisions should be included in a lease deed:-
- Description of lessor and lessee namely name, address etc.
- Description of property namely details of the address and location of property, area covered, type & quantum of construction etc.
- Lease Duration and conditions for renewal and pre mature termination of lease
- Amount of Rent payable, mode of payment, due date and grace period, late payment charges and other charges such as society charges, utility charges should be specified
- Amenities and facilities in the premises which the lessee is entitled to use such as pool, security systems, lift etc.
- Amount of security deposit and conditions for refund/forfeiture of deposit
- Subletting clause allowing/restricting sub letting of property by lessee
- Rules and Regulations to be followed by the lessee and consequences of violation
- Arbitration or dispute resolution mechanism
- Jurisdiction over the lease deed- stating that in case of dispute which court will have jurisdiction to deal with such matters
