Tuesday, July 23, 2024
Tuesday, July 23, 2024

Sample Format of Lease Agreement India

by Swati Raghuwanshi
Format of Lease Agreement 

A lease agreement and a rent agreement are two types of different forms of agreement between the landlord and the tenant. Several times, people get confused between an agreement for lease and a rent agreement and use them interchangeably. But the reality is that they are two different forms of agreement used for two different purposes. They cannot be used interchangeably. To make both of them understand in easy and simple language for laymen, we will discuss the sample format of an agreement for lease and how it is different from the rent agreement in the current blog. This will clear every doubt regarding an agreement for lease and how it should be drafted.  

What is a Lease Agreement? 

An agreement which is as per the Indian Contract Act of 1872 between the landlord and the tenant for rent with respect to a particular property for a particular duration of time is known as a lease agreement. Mostly such kinds of agreements are useful for commercial properties because they are taken for a longer time period. Big brands or any type of business prefer to take property on lease for a longer period of time instead of taking it on rent for a shorter duration. As an illustration, we can take the example of franchises of big brands. They always prefer to take property on lease because, after a period of time, customers start associating their goods and services with the place where they are found. Changing the place frequently can amount to a loss of their customer base. 

Important Clause of an Agreement for Lease

Some of the important clauses of an agreement for lease are given below in detail.

Details of the Parties 

In a Lease Agreement, there may be two or more than two parties involved. These parties can be an individual, entity, organisation or institution. A private limited company, one-person company, limited liability partnership firm or even a section 8 company can become the party in an agreement for lease. Everything regarding the parties involved in an agreement for a lease must be given in detail in an agreement for a lease.  It is necessary to give the details of the parties involved for future reference. Without having the proper details of the parties, a legally enforceable agreement cannot be drafted.

Property Description 

The second most important detail of an agreement for lease is the details of the property, which is going to be given by the landlord on rent to the second party who is going to take that property on rent. In the entire agreement, the main subject matter is the property; hence, its details must be given in the property-related clause of the agreement. 

Details of Rent and Deposit

A lease agreement is a kind of rent agreement; each and everything regarding the rent must be mentioned in the agreement. it is very necessary so that there will be no dispute in future between the parties regarding the amount of money which needs to be paid as rent. Rent can we pay per month as agreed between the parties.  Also, if the landowner wants to take a deposit, everything regarding the deposit must be mentioned in the agreement. For lease deposits can be taken in one time or in installments. It’s up to the agreement between the parties

Lease Term 

The next Clause is related to the terms of the agreement. As already mentioned, an agreement for a lease is for a longer duration of time, but still, it is necessary to mention how long the landowner wants to give the property to the second party for clarification purposes. If the particular duration is not mentioned in the agreement, it cannot be considered a valid agreement. 

Maintenance and Repair 

An agreement for lease involves a property that has been given on rent for a longer period of time. Sometimes, properties need repair and maintenance between the period for which it has been given on lease. So in case such property needs maintenance and repair, who is going to do that and how it is going to happen, all this should be mentioned in the agreement so that there will be no disputes regarding the same in future. 

Use of the Property 

Whenever a lease agreement has been signed between the parties, it is definitely for a purpose. The purpose for renting the property on the lease must be mentioned in the agreement for the lease. Also, the second party who is going to take the land on lease must use the property for that purpose only. It cannot use the property beyond the agreed purpose.  

Governing Law 

As a lease agreement is a legally enforceable contract between the two parties, in case the terms and conditions or any clause of the agreement are violated by the parties, they can move to a court or adopt an ADR process to solve the dispute between them.  In an agreement for a lease, a clause about the governing law and ADR must be mentioned. 

Format of Lease Agreement 

An agreement for a lease has been mainly divided into three parts. The first part is like an introduction where the information regarding the parties of the agreement, date and place of execution of the agreement has been mentioned. In the second part which is also known as the main body of the agreement, various clauses have been mentioned. Some of those close are given above. These clauses must be read carefully before signing the agreement. In the end, the names of both the parties and two witnesses with their signatures have been mentioned. 

An agreement for lease has been drafted on the stamp paper. The stamp duty of such an agreement has been according to the amount they are involved. All the important documents or papers must be attached with an agreement for lease in the form of an annexure or schedule.  These annexures and schedules are also part of the agreement. In a standard format of an agreement for lease, the above-mentioned three parts are always found. Language and content may vary, but parts cannot be cut short. 


A lease agreement in India is an agreement that is a legally binding contract between two parties that includes a landlord and a tenant. It is typically used for longer-term arrangements, especially in commercial properties. It differs from a simple rent agreement and serves to establish clear terms and conditions for the use of a property over an extended period. This agreement typically comprises an introduction section, the main body with various clauses, and the signatures of both parties and witnesses. It’s essential to draft such agreements on stamp paper with the appropriate stamp duty based on the transaction amount. While language and content may vary, these fundamental components remain consistent in a standard format of an agreement for lease. Therefore, understanding these elements is crucial when entering into a lease agreement to ensure the rights and obligations of both parties which include landlord and tenant are clearly defined and legally enforceable.

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