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Essential elements in Office Lease Agreement

If you are new to the world of commercial real estate, an office lease may seem very complicated. Lease agreements can run into multiple pages of perplexing legal language and terminologies, cost your company several lacs of rupees in drafting and vetting and lock you into space for years. However, underneath all of the complexity lies a relatively straightforward business transaction.

In the northern part of India, Delhi NCR registers a huge number of leasing transactions every day.  Amongst all the commercial leasing, Office leasing in Gurgaon happens the maximum.

An office lease gives a tenant the right to occupy and use space in someone else’s building or premises for a stipulated period of time. Of course, the landlord expects to be paid for the use of that space, and that surely gets captured in the Lease agreement in the form of rent. Your lease also spells out several other rules that determine your responsibilities and obligations to your landlord and your rights to your space and to the building throughout the tenure of your lease period.

 

1. Rental component

Generally, you make monthly rent payments to your landlord as a part of your office lease. The Rent at times gets paid quarterly in advance or monthly in advance depending on the terms mutually agreed. Apart from Rent, the cost of other services and maintenance provided by the landlord is billed separately and in some cases, the Rent may include such charges.

Usually, Rent is negotiated on a per square feet basis. However, at times negotiations happen on a lump sum basis as well which may include all the other maintenance charges, electricity, water charges, etc.  Office leasing in Gurgaon covers many such aspects.

2. Office Lease Commercial Terms

Typically, the lease binds a company up for a period of years. Also, the Owners/landlords are usually willing to offer better commercial terms if you sign a longer lease. After all, it can be expensive for them to find new tenants, pay brokerages, stamp duty charges, etc. So they would rather do as little re-leasing as possible. Generally, it is a common practice by the landlords for all kinds of available office on Rent in Gurgaon particularly.

On the other side, at times, long leases with longer lock-in periods aren’t always a good idea. It would mean that your company will be stuck in space for a long time. If at all your Business requirements change and you require either a large space or for that matter a smaller space or different location, then you would not be in a position to do so if you have signed up for a longer lock-in period. Whereas, if your needs don’t change, then certainly a long lease would help a great way to save money.

3. Your Rights Under a Lease

There are two very important differences between a Residential lease and Office lease. Firstly, certain tenancy rights under the Tenancy Act offer special legal protections for residential tenants, but you typically won’t get any special treatment as a commercial or office space tenant. Secondly, while at times, many residential leases have automatic termination provisions that don’t let you continue with the possession of your space, but under a typical office lease, you have provisions of automatic renewals until the client serves a written notice for termination. In a commercial office lease, such commercials are already negotiated and agreed upon.

Regarding a similarity between Residential and Office lease, you get to occupy and be in possession space during the term of your lease as long as you follow its requirements and don’t breach any of the signed terms. Your landlord can’t unreasonably disturb you in your space. Moreover, the landlord has to ensure that the Building is well maintained at all times conducive enough for the client or tenant to enjoy a peaceful & secure possession.  Typically, the landlords of all such available Office on lease in Gurgaon hire a 3rd party Maintenance Agency which makes sure that an optimum level of Maintenance services are provided to all the tenants in the Building.

 

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