Commercial lease agreement with a title search of the landlord
Draft commercial lease agreements with title verification to protect ownership rights and avoid property disputes.
- Price
- From Rs 18,000, title search report included. Stamp duty and registration fee at actuals.
- Turnaround
- Title report first; the lease draft follows in 2 to 3 working days once the title is clear.
- Delivery
- Title report and lease draft by email, with a registration checklist.
- Revisions
- One round on the lease included.
- Who it suits
- Businesses taking an office, shop or warehouse for several years, with a sizeable fit-out.
On this page
What is a commercial lease agreement?
It is a contract under the Transfer of Property Act, 1882 by which an owner lets premises to a business for its trade or office for a fixed term, in return for rent. A lease gives the business an interest in the premises, and once registered it binds anyone who later buys the building (Section 109). That is what a lessee wants before it spends on an office fit-out or a store meant to run for years.
In Maharashtra many owners prefer a leave and licence agreement even for business premises. For a short or low-investment let that works, and our commercial leave and licence drafting covers it. For a term of several years with a large fit-out, a registered lease signed after a title search gives the lessee more to stand on.
Why the title search comes first
A lease granted by someone who does not own the premises, or by an owner whose bank is about to enforce its mortgage, is worth very little. A lessee that has fitted out a floor and then receives a possession notice from the owner's lender has few options. The search tells you, before you are committed, whether the person signing can grant what the lease promises.
What the title search for commercial property covers
- The ownership chain, traced through Sub-Registrar records usually for about 30 years, and whether the person named as lessor is the present owner, or all of the co-owners.
- Charges on the property: registered mortgages, CERSAI entries and, where the owner is a company, charges filed with the Registrar of Companies.
- The sanctioned plan, the occupancy certificate and the permitted use of your unit. Running an office from premises approved for residential use invites a municipal notice.
- Leasehold land: whether the building stands on CIDCO, MIDC or other leasehold land, and whether letting needs that authority's consent.
- The society or owners' association: its no-objection, and its rules on signage, timings and loading.
- Property tax dues, and litigation that shows up in the records we search.
- The signatory: a valid board resolution for a company owner, or a power of attorney that has not been revoked.
You receive a written report: what is clear, what is not, and what to ask the landlord to fix before you sign. More on the method is on our property title search page.
If the building is mortgaged
Many commercial buildings are, and that alone is no reason to walk away. Section 65A of the Transfer of Property Act lets a mortgagor in possession grant leases binding on the lender only within narrow limits, and most mortgage documents exclude even that. So the lender's written consent is what protects you. Ask for it, and ideally for a non-disturbance letter, in which the lender agrees not to disturb your occupation while you pay rent, even if it enforces the mortgage.
If the owner has already taken a loan against the rent, the bank will want you to sign a tripartite agreement. Our page on lease rental discounting agreements explains what that asks of a tenant.
What goes into the commercial lease deed
- The lessor's statements on title and approvals, with an indemnity and a right to set off losses against rent if they prove wrong.
- Quiet enjoyment. Section 108(c) already implies the lessor's promise that you may hold the premises without interruption while you pay rent; the deed should say so expressly and extend it to the lessor's lender and any buyer.
- Rent, a rent-free fit-out period, escalation, and common area maintenance charges with a cap or a right to see the accounts.
- A lock-in that binds the lessor for the full term, and the lessee for a shorter period.
- Exit: the lessee's right to end the lease on notice after the lock-in, and the lessor's right to end it only for listed defaults, after time to cure.
- Assignment or sub-letting to group companies, or to a buyer of your business.
- Damage to the premises. Section 108(e) lets a lessee avoid the lease if fire, flood or a similar force destroys the premises or makes them substantially and permanently unfit. The deed should also deal with partial damage and suspend rent while repairs are done.
- Reinstatement: the condition in which you hand back the premises, and what happens to your fit-out.
- GST and TDS on rent, which your chartered accountant should confirm.
Office lease agreement or shop lease agreement: what changes
An office lease agreement turns on common area charges, parking, power back-up, working hours and lobby signage. A shop lease agreement turns on frontage, the signboard, trading hours, exclusivity within a mall, any revenue-share rent, and the trade or food licence the use needs. A warehouse adds floor loading, truck access and a fire NOC for the goods stored. A commercial lease agreement format found online carries the same headings for all three, which is why it rarely fits any of them.
What you send us
- The landlord's title papers as you have received them: sale deed or agreement, Index II, earlier deeds in the chain, share certificate, and the property card or 7/12 extract.
- The occupancy certificate and sanctioned plan, or the developer's completion papers, and the latest property tax bill.
- The term sheet or letter of intent, signed or in draft.
- Your company's incorporation documents and board resolution, and the landlord's if it is a company.
- Your fit-out plan and the date you need to open.
If the landlord is slow to share papers, that itself tells you something. We can send them a short, neutral list of what is needed.
How does the title search and drafting work?
- Brief: you send the papers and we call to understand the deal and your timetable.
- Title search: we search the records and send a report with the risks and what the landlord must cure. Its timing depends on the records office and the length of the chain, and we give you a date once we have seen the papers.
- Negotiation points: we list what to ask for in light of the findings, such as the lender's consent, a non-disturbance letter or a co-owner's signature.
- Lease draft: within 2 to 3 working days once the title is clear, followed by one round of revisions.
- Stamp and register: we give you the duty figure and a checklist, and both sides sign before the Sub-Registrar.
We handle premises anywhere in India online from our office in Sanpada, Navi Mumbai. Clients in Mumbai and Navi Mumbai are welcome to meet us there.
Stamp duty and registration for a commercial lease deed
A lease for more than a year must be registered under Section 17 of the Registration Act, 1908, and stamp duty follows the law of the state where the premises are. In Maharashtra, Article 36 of the Maharashtra Stamp Act, 1958 charges a lease on a share of the property's market value that rises with the term, from 10 per cent for up to five years to 90 per cent beyond 29 years. Our lease agreement drafting page sets out each bracket. That cost is one reason business lets in Maharashtra often use leave and licence instead, charged at 0.25 per cent under Article 36A.
Who pays for a commercial lease agreement?
Whoever the parties agree. If the deed is silent, stamp law puts the duty on the lessee: Section 29 of the Indian Stamp Act, 1899 says so for leases, and state stamp Acts carry a similar default. The registration fee is usually paid with the duty. Each side normally pays its own lawyer, though a landlord keen to close sometimes bears the drafting cost.
Mistakes lessees make
- Paying a deposit with a binding LOI before any title search. Make the LOI subject to a satisfactory title report.
- Starting the fit-out before the lease is registered. Once the money is spent, you have little room left to negotiate the lease terms.
- Accepting a landlord's right to terminate "for any reason" during your lock-in.
- Ignoring the owner's lender. Without its consent, the lease may not bind the bank if it enforces.
- Assuming the use is allowed. A clinic, eatery or office in a building approved for another use can be sealed.
- Taking the signatory on trust. A power of attorney holder whose principal has died, or a director without a board resolution, cannot bind the owner.
Related services
If the title report turns up a clerical error in the landlord's deed, such as a wrong unit number or area, it is usually cured by a registered deed of rectification before you sign. For a dispute over the deposit, repairs or possession, see landlord and tenant disputes.
Frequently Asked Questions
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By the route the deed gives you: notice after the lock-in, a break clause, or termination for the other side's default after the cure period. Otherwise both parties can agree to a surrender, recorded in writing, stamped and, for a registered lease, usually registered. Leaving during the lock-in normally means paying the rent for the rest of it. A landlord cannot cancel a registered lease by letter alone; Section 111 of the Transfer of Property Act lists how a lease ends.
It depends on the term and your investment. Leave and licence is cheaper to stamp and simpler to end, which suits short lets and small fit-outs. A registered lease gives an interest that survives a sale of the building and can be mortgaged with the lessor's consent, which matters for a long term or a heavy fit-out. The duty on a lease is much higher, so weigh it against what you stand to lose.
Usually about 30 years of Sub-Registrar records, plus the revenue or city survey records and the charge registers. For a newer building we also go through the developer's title to the land and the approvals for the building. If the chain has a gap, such as a missing deed or an unrecorded inheritance, the report says so and tells you what document would close it.
It is a letter from the bank that holds a mortgage on the building, agreeing that if it enforces its security it will let the lessee stay on the lease terms as long as rent is paid. Banks give it more readily for large, creditworthy lessees, and sometimes only in their own format. Even a plain consent to the lease is worth having. Without either, your position depends on the order of the mortgage and the lease and on how the lender enforces.
Yes. Under Section 109 of the Transfer of Property Act, the buyer steps into the landlord's shoes: it gets the right to the rent and takes on the landlord's obligations under the lease. That protection is strongest when the lease is registered, because a buyer checking the records will find it. The deed should also say how your deposit passes to the buyer.
Generally, yes, when the landlord is registered for GST. Since October 2024, where a landlord who is not registered lets commercial premises to a GST-registered business, the tenant pays the GST under reverse charge. TDS on rent also applies under the Income-tax Act, 2025. Rates and thresholds change, so confirm them with your chartered accountant before the rent clause is final.
Most problems can be fixed before signing: a co-owner joins the lease, the lender gives consent, a missing deed is produced, or an error is corrected by a rectification deed. Some cannot, such as a seller in the chain who had no title. The report tells you which kind you have. The fee covers the report either way, so you can walk away before spending on the lease or the fit-out.
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