points to be remember while leasing in commercial property in India

Tips for Leasing Commercial Property in India

Leasing commercial property is quite popular in India. This is mainly because of the high rate of commercial property in Delhi/NCR and other major cities.

While leasing typically works like renting a property, there are a number of important factors to consider in order to make sure that the lease turns out good for your business and suits your budgetary needs.

So, if you are leasing commercial property for the first time, here are a few things you should know about it.

Leasing can be of different types


Previously, commercial and residential leases in India used to be perpetual or for 99 years which automatically made them last for an immemorial time.

However, now with high demand for commercial leases in major cities like Delhi/NCR, the terms have changed.

Leases are mainly of the following types:

Gross Lease: 

Where all expenses are borne by the landlord including taxes, maintenance, insurance, etc.

Net Lease:

Where the tenant not only pays the rent but also bears other costs associated with normal operations of the property

Single Net Lease:

Under which the tenant pays the rent plus a portion of the property tax

Double Net Lease:

Wherein the tenant pays the predefined rent plus a portion of the taxes as well as insurance

Triple Net Lease:

Under which all costs are borne by the tenant in addition to the rent

tips for leasing a commercial property in India

Rent is not your only obligation

As mentioned above, there are different types of commercial leases in the market and based on the type of lease agreement you enter into, you may have to bear certain other costs in addition to the rent.

All your financial obligations related to the lease will be mentioned in the lease agreement and you should read it carefully. You can also try to negotiate a better deal with your landlord so that you do not have to pay amounts other than the rent.

Lease entails several terms and conditions

The lease agreement has several clauses with the most important ones relating to the tenure of the lease and the rental amount. Also, it talks about the lock-in period, premature termination and more.

This is why it is extremely important to read the lease. If you are leasing for the first time, it is best to hire a lawyer.

Benefit over Buying the Property

Before you decide to lease, you should also do some research about whether you can buy a commercial property instead of leasing one.

The main benefit that leases have over buying is that you do not have to pay the hefty down payment which makes it more affordable. If you think that you can afford to purchase an office space or retail space and it suits your needs, you should consider the same.

You may be allowed to build additional space

Depending on the terms of your agreement, you may be allowed to make certain modifications to the leased property. Usually, properties within commercial projects offer an only minimal modification.

However, landlords of retail shops are more flexible about this as retail shops would need a change in orientation as per the needs of the business. You should see whether your lease agreement mentions a clause about the modification of the property.

So, if you are thinking of leasing commercial property in India, there are a lot of options available in the market.

Recently completed projects in Noida have also started giving out units on lease at a very affordable cost.

But before you sign a deal, consider the tips mentioned above and stay away from any fraudulent activities or terms that you would regret at a later stage.