DR.

RAM MANOHAR LOHIYA NATIONAL LAW

2017-2018

DRAFTING, PLEADING & CONVEYANCE

FINAL DRAFT

ON

DRAFTING OF LEASE AGREEMENT

SUBMITTED TO:- SUBMITTED BY :-

Ms. Shakuntala Sangam Shubhangi Agarwal

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 ACKNOWLEDGEMENT

This project titled Lease Agreement has been prepared for fulfilment of project on Drafting,

Pleading and Conveyance which forms the part of curriculum of the study in Dr. Ram

Manohar Lohiya National Law University.

I am very thankful to Ms. Shakuntala Sangam without whose kind co-operation

the project would not have been completed

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 TABLE OF CONTENTS

1. Introduction...........................................................................................................(4)

2. Mutual Consideration For Both Parties………………………………………..(4)

3. Application Forum………………………………………………………………(6)

4. Supreme Court Ruling on Lease Agreement….………………………………..(6)

5. Draft of Lease Agreement.....................................................................................(9)

6. Bibliography.........................................................................................................(10)

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 INTRODUCTION

The contract selected here is lease agreement which is a contract between two parties in

which the landlord gives right to tenant to live on his property for a mentioned time period

and to surrender the property after the mentioned time.

In this lease agreement, the tenant is allowed to use a property of the landlord form a

specified time period mentioned in the agreement. The description of the property including

its full address, furniture and other accessories included in the property is given in the

agreement. In this agreement, the rent of the property is predefined and it is also mentioned

that to whom the rent should be given and at what place the rent settlement will take place.

The services provided by the landlord, which are included in the rent amount, like electricity;

gas supply, water supply etc. are mentioned in the agreement so that in future, no mismatch

of agreement can take place.

The tenant is asked to deposit a amount as initial deposit (advance) which in case the tenant

do not pay rent or cause any damage to landlord property can be used by landlord.

The proposal does not specifically reflect who is making the agreement and who is accepting.

It is a general contract between a tenant and a landlord.

Mutual Consideration For Both Parties

The agreement is a balance agreement, which gives consideration to rights of both the

landlord and the tenant. The basic considerations covered in the agreements are as follows:

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 Basic specifications

1. Name of the parties undergoing agreement

2. The duration of the agreement

3. Initial deposit amount

4. Rent amount

5. Service that are included in the rent

6. Time period given to tenant and landlord to resettle the agreement once the actual date

is expired.

Based on the above basic specification we can identify the considerations given to both
parties. They are as follows:

Landlord

An initial deposit amount is clearly mentioned in the lease agreement. In this, it is clearly

mentioned that the landlord can use the deposit if the tenant is not able to pay monthly

installment on time. It is also written in the document that the initial deposit can partly

refunded by the landlord if he found any damage to his property rented.

The agreement also mention that if the tenant want to reconsider the agreement, he must sent

a application 15 day prior to the date of expiry of the agreement otherwise, the agreement

may not be considered for renewal, this saves the rights of the landlord.

It is mentioned that the tenant cannot sublease the property without prior permission of the

landlord, this will again a beneficial clause for landlord. The landlord from this agreement

make is clear that any accessories under this property should be maintained properly

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otherwise an amount from initial deposit can be used to recover the damage.

To preserve the right of the landlord, it is mentioned in the agreement that tenant must use the

property peacefully and must vacant is at desired date.

Tenant

Tenant’s rights are also well considered in the agreement. It is given that what all services are

there which the landlord should provide to the tenant. In addition, it is also mentioned that the

landlord cannot enter the premises under agreement without the permission of the tenant.

Most important consideration for tenant is the clause which makes it very clear that any

decision related to the property should be taken with the permission of tenant too. This will

protect the rights of tenant during the legal dates of the contract.

It is also mentioned that it is the landlord’s responsibility to maintain the premises clean and

well maintained. This dimension does not fall in responsibilities of tenant.

Legal Purpose Of Lease Agreement:

The purpose of the agreement makes a transparent set of rules between the landlord and the

tenant for the use of property. The agreement serves the requirement of both the tenant and

the landlord. It protects the landlord from any damage to his property, unlawful control of the

tenant on his property etc. At the same time, the contract serves a tool to protect tenant from

unmeaning full disturbances that the landlord may create.

The agreement is thus a legal document that will serve for rights of both the involved parties.

The agreement can be used by any of the party in case any violation is found from the other

party involved.

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 Legal Capacity Of The Agreement:

The agreement is easy to understand by both the parties. It clearly mentions the rules and

obligations for both the parties. The various clauses are written in points so that both of the

parties can understand the contract easily.

Taking about the legal ability to understand the contract, the contract nearly converted all the

appropriate clauses for both the tenant and the landlord. One possible drawback in

understanding comes from the non-disclosure of the settlement process in case any damage to

property is caused. This puts a little uncertainty for the tenant.

Talking about the ability to enter into re-bidding of the contract, it is given in the contract that

if tenant want to renew the agreement, he or she must contact the landlord 15 days prior to

the actual expiry date of the agreement. In case none of the parties contact each other before

the expiry, the duration of the contract will be automatically increased by one month.

The agreement is signed by both the parties with complete reference and thus both the parties

can use the agreement legally.

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 DRAFT OF LEASE AGREEMENT

THIS DEED OF LEASE made on this ____________day of

_________20____at_______________ __________ BETWEEN

1.Shri___________________s/o____________________aged__________years,
Occupation:_________________ residing at ____________________

2.Shri___________________s/o____________________aged__________years,
Occupation:_________________ residing at ____________________

3.Shri___________________s/o____________________aged__________years,
Occupation:_________________ residing at ____________________
(Hereinafter referred
to as the ‘Lessor’, which term shall mean and include wherever the context so requires or
admits his/their heirs, successors, administrators, executors, attorneys and assigns) of the
ONE PART.

AND

State Bank of Hyderabad, a body corporate constituted under the State Bank of Hyderabad
Act, 1956 having its Head Office at Gunfoundry, Hyderabad and a branch interalia
at______________ (hereinafter referred to as the ‘Lessee’, which term shall mean and
include wherever the context so admits or requires its successors, administrators, and assigns)
of the OTHER PART.

WHEREAS the Lessor(s) is/are the absolute owner(s) of the building bearing No.
__________________situated at ________________ having acquired under a sale deed
bearing no._________________ dt._______________ / having inherited from his/their
ancestors.

WHEREAS the Lessee being in need of accommodation for its use and occupation for the
purpose of its branch/office has requested the Lessor to grant lease of the said building
admeasuring about ____________Sq.ft. more fully described in the schedule annexed

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hereunder (hereinafter referred to as the ‘Said Premises’), along with parking place for a
period of __________ years certain on a monthly rent of `____________ commencing from
__________ to ___________ with an option to the Lessee to continue the lease for a further
period of ____________ years with _____% increase in monthly rent over the existing rent
for the renewed period.

AND WHEREAS the Lessor has agreed to grant the lease of said premises to the Lessee.

NOW THEREFORE THIS DEED WITNESSES that in pursuance of the above agreement
and in consideration of the rent herein reserved, the Lessor hereby demises by way of Lease
of the said premises, unto the Lessee together with all easements appertaining thereto on the
following terms and conditions:

1. That the Lease shall be for a period of _______ years certain with an option to the
Lessee to continue the lease thereafter for a further period of ________ years with
__________% increase in the rent over the existing rent for the renewed period,
provided the Lessee gives notice of such intention to extend / renewal. The Lessee
shall however, have the liberty to vacate the premises at any time during the period of
lease by giving three months prior notice in writing by registered post to the address
given above or such other address of the Lessor registered with the Lessee. The lessor
shall have no right to terminate the lease before the expiry of the lease period of —-
years agreed hereto.

2. The lease commences from _____________ (mention date). #(from the date of
handing over possession of the said premises). That the Lessee shall pay to the Lessor
or his/their authorized agent a monthly rent of ` ________ p.m. for the said premises
for the certain period of lease and the rent for each month shall be paid on or before
the 6th day of the succeeding Month, calculated according to Gregorian Calendar. 
#
If possession is to be given, to incorporate this clause.

3. That the Lessee has paid to the Lessor a sum of `________

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 towards monthly rents payable by the Lessee or repayable by the lessor to the lessee
on expiry of the lease period, or on termination of the lease or on termination of the
lease even before the expiry of the lease in which case the lessee may demand the
lessor to adjust the deposit amount towards rent for the notice period and to refund the
balance amount, if any.

4. The Lessor has good title, rights and power to grant this lease of the property to the
Lessee. In case of any dispute over the rights / powers of the Lessor resulting in
loss/damages to the Bank and/or proceedings / suits/claims/demands against the Bank
the Lessor shall indemnify and keep the Bank indemnified at all times against all such
loss/damages/claims etc.

5. That the Lessor shall arrange at his/their own expenses for water connection and
provide taps at the required places as deemed necessary by the Lessee.

6. That the Lessor shall arrange at his/their own expenses for electric connection and
provide electric points for light, fans, air conditioners, and meters and for other
electrical equipments as per the requirement of the Lessee with necessary switches
and holders and maintain them in good condition at his cost and repair/replace them
wherever warranted.

7. That the Lessor shall pay all taxes, rates, cess whether at the rate existing on the date
or enhanced at any time during the lease period and any other levy including
penalties, if any, charged/demanded thereon in respect of the said premises such as
Corporation/ Municipal/ Panchayat Tax, Urban Land Tax, Service Tax /sanitation tax/
drainage tax, any other taxes including new taxes / enhanced taxes/services
whatsoever nature, etc. due to the State Government, Central Government or other
Local or other Civic Authorities. The Lessee shall be at liberty to pay the above tax,
rate or cess or other levy including penalties, if any, charged/demanded thereon in
case of default or delay on the part of the Lessor and consequential demand or distress
being raised on the Lessee, after giving notice of the said demand to the Lessor and in
such case the Lessee is authorized to adjust the amounts so paid together with interest
and other incidental expenses, from out of rents in respect of the said payment
becoming due immediately after the said payment or demand reimbursement of all

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 such amounts, costs, expenses etc. with interest at _______% per annum from the date
of such payments until realization by the Lessee.

8. That the Lessor shall keep the said premises in a state of good condition and
substantial repairs. The Lessor shall carry out at his own cost all repairs (including
periodical distempering once in three years and painting of doors and windows in
every three years)* of the said premises. If the Lessor fail(s) to carry out such repairs
(including periodical white washing and painting)* within one month from the date of
receipt of such request from the Lessee, the Lessee shall be at liberty to get it done
and adjust the amount spent or expended for such repairs, distempering, etc. with
interest @ _______% per annum from the rent payable to the Lessor or the Lessee
shall have the right to recover the same from the Lessor.

9. The lessee shall have the right to use or under lease or sub-lease the said premises or
part thereof to any of their branches, offices or associates or subsidiaries or its parent
bank and they shall have the right to utilize the premises for any of its various needs,
and any notice in this regard given by the Lessee to the Lessor is and shall be binding
under these presents.

10. The Lessor shall be deemed to have granted all rights of way, water, air and privy or
other easements appertaining to the said premises.

11. That the Lessee shall have the right to utilize the subject premises for any of its
various needs in any manner.

12. That the Lessor shall grant all rights of way, water, air, light and privy and other
easements appertaining to the said premises.

13. That lessor shall provide parking space/area (**) free of rent and the Lessee shall have
the exclusive right on parking space for parking of the vehicles of staff members and
customers of Lessee in front of the said premises and the same shall not be disturbed,
obstructed or encroached upon in any manner by any persons whosoever.

14. That the Lessee shall pay all charges for electricity and water* actually consumed by
the Lessee during the occupation and calculated as per the readings recorded by the

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 respective meters installed in the premises. (i.e.*proportionate charges)

15. That the Lessee shall handover vacant possession of the said premises to the Lessor
on the expiry of the lease period fixed herein or on the expiry of the period of option,
should the Lessee avail itself of the same in the same state and condition as on the
date of occupation but subject to natural wear and tear due to ordinary use and lapse
of time.

16. That the Lessee shall not make any material structural alterations to the building
without the information and permission of the Lessor. However, the Lessee is at
liberty and no permission of the Lessor is required for fixing wooden partitions,
cabins, counters, false ceiling and to fix other office furniture, fixtures, electrical
fittings, air conditioners, exhaust fans, grill doors/glass doors and other fittings etc. as
per the needs and requirement of the Lessee and/or to make such other additions and
alterations on the premises which will not affect the permanent structure.

17. That the Lessee has absolute right to install any electrical gadgets like ‘V-SAT’ or

‘ATM’ (Automatic Teller Machine) or UPS or any other gadget or a
communication terminal with necessary accessories /equipment or disc antenna or
otherwise at its cost either in the premises or on the terrace/roof top or any portion of
leased premises for its needs at any time without disturbing the basic structure of
premises and at the time of vacating the premises the same shall be removed at its
costs. The Lessor shall provide suitable space with proper enclosures for installation
of such gadgetries on immediate possession of the said premises by the Lessee.

18. The Lessor shall not object or raise dispute about such installation or use of
communication, during the subsistence of lease. The Lessor further agrees that no
additional amounts shall be paid as rent for such installation or use.

19. The Lessor hereby agrees that they have no objection to the Lessee in installing the
exclusive generator set or sets for the use of the offices, whether such generator set/s
is/are owned by the Lessee or taken on hire from a third party for the exclusive use of
the Lessee. Further, the Lessor agrees to provide a suitable space, with proper
enclosures for such installation without claiming any further expenses or costs from
the Lessee.

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20. “The Lessor shall provide lift facility and bear all the costs for the maintenance of the
lift. The Lessee will pay the electricity bill to the extent of ————— (proportionate
with other lessees/users of the premises) of the bill. For the operation of the lift the
consumption of electricity will be measured by a separate meter.”

21. That the Lessee is at liberty to keep, maintain, exhibit or affix its name board, bills,
hoardings, notice boards, sign boards, glow sign boards, lights and advertisements on
the interior/exterior of the said premises/building and the Lessor shall not claim any
additional rent from the Lessee and shall not object for the same. The lessee pay / bear
taxes on such Boards if required to be paid under any laws and _________ replace
such Boards at its costs also.

22. That in the event the Lessor decide(s) to sell the demised premises during the
currency of the Lease or the extension thereof, the Lessor shall in first instance offer
to sell to the Lessee at the market price and the Lessee shall accept or reject such offer
within ______ calendar months from the date of receipt of the offer.

23. That the Lessee has right to remove at the time of vacating the said premises, all
electrical fittings, fixtures, counters, safes, strong room doors, safe deposit lockers,
partitions, furniture and all other equipment and electrical gadgets with accessories
put up inside/outside and/or at the terrace/roof top of the said premises/building by it.

24. That the Lessor or any person rightfully claiming from or under him over the said
premises, shall not interfere, obstruct or hinder in any way with the quite and peaceful
possession and enjoyment of the said premises together with all easements thereto, by
the Lessee.

25. The Lessee is at liberty to vacate the premises, at any time during the continuance of
lease, by giving three months notice in writing and the Lessor shall not have any
objection or any claim in this regard and not entitled for any compensation/damages.

26. The cost of stamp and registration charges for registration of this lease deed and the
lease deed to be executed on renewal of the lease shall be payable by the lessee and
lessor in the ratio of 50:50.

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 BIBLIOGRAPHY

1. Ratan Lal & Dhiraj Lal, ‘Law Of Property’, LexisNexis Butterworths Wadhwa, 19th edn.

2010.

2. Dr KN Chandrasekharan Pillai, ‘Drafting and Legal Agreements’, 5th edn. EBC, Lucknow,

2012.

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