Leasing a shop or office? Read the lock-in before you sign.
Upload a commercial lease or leave and licence for business premises in India and get the lock-in, escalation, security deposit, CAM, fit-out, registration and exit terms checked against Indian law.
What people are surprised to learn
A lease of business premises for more than a year must be registered.
Under the Registration Act (s.17) and the Transfer of Property Act (s.107), a lease from year to year or for more than one year needs a registered instrument, and an unregistered one that required registration may not be admissible as evidence of the lease (s.49). We flag the term, the registration step and who bears stamp duty, and leave the rate to your state.
What this review checks
- Lock-in binding only the tenant, and what you pay to exit during it
- Rent escalation percentage and frequency
- Security deposit, interest and refund timeline
- CAM and maintenance charges, caps and audit
- Registration and stamp duty (Registration Act s.17, TPA s.107)
- Fit-out period, ownership of fit-outs and reinstatement
- Subletting, assignment and group-company use
- GST on rent, TDS references and personal guarantees
Quick answer
What should I check in a commercial lease in India before signing?
Check the lock-in period and what you pay if you leave during it; the rent escalation percentage and how often it applies; the security deposit, whether it earns interest and when it is refunded; CAM and maintenance charges and whether they are capped; whether the lease needs registration and who pays stamp duty; the rent-free fit-out period; and whether you can sublet or assign if you sell the business.
Who this review is for
- Shops, restaurants, cafés and clinics taking premises on lease
- Startups and SMEs leasing office or co-working space
- Businesses taking a warehouse or godown on leave and licence
- Franchisees signing the lease that comes with an outlet
How it works
- 1
Upload the agreement
PDF, Word, a photo or pasted text, with its schedules and annexures.
- 2
Choose your state
Stamp duty, registration practice and tenancy law vary by state, so the report tells you exactly what to confirm locally.
- 3
Read the report
Lock-in, escalation, deposit, CAM, registration and exit terms, each explained in plain English with the clause quoted.
- 4
Raise the points
A suggested redline and a polite email to the other side, phrased as questions rather than demands.
7 red flags to look for
A lock-in that binds only the tenant
You cannot leave for years, while the landlord may still be able to end the lease.
Rent for the whole remaining lock-in payable on early exit
A stipulated sum is read down to actual loss under Sections 73–74 of the Contract Act, but you would have to argue it.
A lease over one year with no registration step
The Registration Act (s.17) and TPA (s.107) require registration; an unregistered lease that required it may not be admissible as evidence (s.49).
Escalation left to the landlord, or compounding faster than stated
Rent over a nine-year lease can end up far higher than the first year suggests.
Uncapped CAM or maintenance with no right to see the accounts
You pay a share of the landlord’s spending with no ceiling and no way to check it.
No rent-free fit-out period, or fit-outs forfeited on exit
You pay rent while you build the space, and lose what you built.
No right to assign or sublet if you sell the business
A buyer of your business may be unable to take over the premises.
Terms explained
- Leave and licence
- A permission to use premises without creating a lease, common for 11-month agreements.
- Lock-in period
- The initial period during which the tenant, and sometimes the landlord, cannot end the agreement.
- Escalation
- The agreed increase in rent, usually a percentage every year or every few years.
- CAM charges
- Common area maintenance charges for shared areas, passed on to tenants.
- Fit-out period
- A rent-free period at the start for the tenant to set up the premises.
- Registration
- Recording the lease with the sub-registrar, required for leases over one year under the Registration Act.
- Stamp duty
- A state tax on the lease instrument; an unstamped instrument faces admissibility problems under the Stamp Act (s.35).
Pricing in India
One plan covers all 14 India analyzers. Prices exclude GST at 18%; a GST invoice with your GSTIN is available.
Single Review
₹999 one-time + GST
One contract review. No subscription, pay once, use within a year.
Pro
₹3,299 / month + GST
4 reviews / month. For founders, freelancers and consultants.
Business
₹6,599 / month + GST
10 reviews / month for HR teams and regular reviewers.
Scale
₹13,199 / month + GST
25 reviews / month for high-volume teams and firms.
Commercial Lease FAQs
What should I check in a commercial lease in India before signing?
+
Check the lock-in period and what you pay if you leave during it; the rent escalation percentage and how often it applies; the security deposit, whether it earns interest and when it is refunded; CAM and maintenance charges and whether they are capped; whether the lease needs registration and who pays stamp duty; the rent-free fit-out period; and whether you can sublet or assign if you sell the business.
Why are so many commercial agreements for 11 months?
+
Because a lease from year to year or for more than one year must be registered under the Registration Act and the Transfer of Property Act. An 11-month leave and licence avoids that step, but it also gives the tenant less security.
Is there a legal limit on the security deposit for a shop or office?
+
Tenancy law is a State subject, and whether a state’s rent law covers commercial premises at all varies. We never state a national cap; the report tells you what to confirm for your state and city.
Is GST charged on commercial rent?
+
Renting commercial property is generally a taxable supply, so the lease should say whether rent is inclusive or exclusive of GST and who bears it. The report flags silence on this; confirm the treatment with your chartered accountant.
Can the landlord keep my whole deposit if I leave early?
+
Only if the agreement provides for it, and even then a forfeiture is read down to actual loss under Sections 73–74 of the Contract Act. The report flags forfeiture clauses so you can raise them before signing.
Related India reviews
ClauseAudit provides information and analysis, not legal advice, and does not create an advocate–client relationship. Findings use calibrated language because enforceability depends on facts and forum. Consult a qualified advocate before acting on any finding. See India pricing.