In India Renting a commercial property faces cut-throat competition from within, and thus it’d be needed to work very smartly with the rent agreements. Tenant needs to understand all the questions to ask from the Landlord and all the laws that are perfectly suited for the business. Awareness about laws will help you to avert costly mistakes and will save your money. Every commercial property rent/lease deal is regulated by the Transfer of Property Act.
Now understand, what is a commercial lease agreement, well, it’s a process where the property is leased for commercial purpose. This consists of office, industry, store and other commercial buildings. It looks like a very lengthy process; therefore, we have jotted down a few steps to follow:
Title ownership authentication
Always make sure that you have full information on the ownership of the property and so access to the title deed is a need to validate the rent. Investigate more to verify there is no sub-rent or any other type of rent linked with the property before moving into an agreement with the landlord.
Authorized Plans and Power Of Attorney (PoA)
If the building is under construction which you wish to get on rent, then it is mandatory to verify the commencement certificate as well as title deed which is being issued by the relevant authorities. Before renting a built-up property, it is advisable to check the occupation certificate. In case of indirect rent, check and confirm if there is any form of power of attorney involved.
Must Read: Things To Consider Before Signing The Commercial Lease Agreement
Proper Renting Agreement
Make sure that the renting agreement is properly constructed based on the operations before building any mutual; relationship with the landlord. Be particular regarding the nature of the rent, whether it is a co-working office space or a rental lease agreement.
Mortgage verification & Income Tax
It is recommended to validate the income tax background of the landlord in case of a commercial agreement to confirm that there are no pending disputes or illegal proceedings against the landlord. This will also confirm that the property is classified under the Income Tax Act of 1961 as ‘commercial’ or ‘residential’ under the Development Control Regulations.
Choose A Online Renting Platform
There is no need to go through brokers or agents, as RentScribe is a platform that will give you the freedom to choose the commercial property from a wide list and go for the digital lease agreement. You can even pay your rent through RentScribe online that too with a credit card if you wish to. It’s that simple now.
The Renting Agreement validity
In addition to other clauses, a commercial lease agreement should mention the following fundamental information;
• Property address.
• The rental amount and complete information regarding all sorts of deposits.
• Start and termination dates.
• The interval of payment.
• Names and signatures of all the parties involved.
• The rent renewal provision.
• The names of the landlord and tenants and other parties involved and their signatures.
Make sure if it’s a co-working space agreement, then the working hours should be mentioned otherwise enhancing them in the future may be a lengthy procedure.
Registration And Stamp Duty
It is mandatory by The Transfer of Property Act that lease deeds for a period of more than one-year ought to be registered.
Rent for More Than One Year
It is compulsory to register the lease agreement those are more than a period of one year. Just remember that stamp duty payable on such rent agreements are high and is processed on the average of annual rent beside the deposit payable. The stamp duty payable amount is equal to that of the sale deed.
Tenant need to pay attention to the above-mentioned key factors while leasing/renting commercial space in India. This practice will save you from any unnecessary investment of money and time.
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