Lease Agreement: What It Is & Terms & Conditions

An arrangement here between the lessor and the lessee is referred to as a lease. It outlines the terms of the agreement so that each party is aware of their responsibilities and rights with regard to the lease. Let’s dive into the article!

A Lease Agreement

A lease agreement is a contract between the lessor and the lessee that grants the lessee the right to use a property that belongs to or is managed by the lessor for a predetermined period of time in exchange for recurring rental payments from the lessor.

The lease does not grant the lessee any ownership rights. The lessor, however, has the option to allow the lessee to adapt the property to his needs. Throughout the term of the lease, the lessee is in charge of maintaining the property. Lease contracts can be used to rent out Real estate consultant services , automobiles, home appliances, construction equipment, and other things.

The Provisions of a Lease Contract

Typical elements of a lease agreement are as follows:

  • The names of both the lessor, the lessee, or their representatives
  • Details about the property
  • Rent amount, due dates, grace period, and late fees
  • Rent payment method
  • Methods for ending the contract before its expiration date, as well as any fees that may apply
  • Amount and account information for the security deposit
  • Utilities provided by the lessor, and if there are any lower fees for those utilities, how those fees will be calculated
  • Amenities and facilities on the Patta Chitta Online that the lessee is allowed to use, like a pool, a laundry room, or security measures.

Common Clauses Found in Lease Agreements

  1. Term: The time frame during which the lease agreement will be in force
  2. Rent: It is what the lessee gives the lessor in exchange for the use of the property under lease
  3. Deposits: The amount of any required deposits, the nature of each deposit, and the terms governing its return or adjustment at the conclusion of the lease period
  4. Terms of Use: The intended use of the property as well as the rules and regulations governing its use
  5. Utilities: Which ones are paid for by the tenant and which ones are included in the rent
  6. Insurance: In commercial rental agreements, it is common to specify whether or not the lessee is required to insure the property and BBMP Property Tax Payment.
  7. Repairs and Maintenance: The lessor or lessee is in charge of keeping the property in good condition.

Terms and conditions

When you are leasing or renting out a property, there are several conditions to be included.

For instance, if you are making an agreement for eleven months, what or how the intimation for ending the tenancy will be made, and on what date the tenancy will come to an end, is one consideration. If the tenant wants to continue staying at the property, how or when that intimation needs to be made, and what will be the conditions- will there be an increase in the rent, and if so, what will be the percentage of increase?

If the lessee has made an agreement for five years, will there be an interim increase in rent/lease? How and when will the rent be paid every month and what will be the mode of payment? What is the rent amount fixed for the lease period? Whether the property is Let on lease or rent. (There is a marked difference between how a lease works and how rental agreements are made).

Occupancy limits:

The lease agreement should specify the number of individuals who will be staying in the property. As it is seen in many cases, India is a country where guests have divine powers and can stay for as long as they wish.

This may result in the property being Let occupied by a group of individuals who never figured in the lease agreement, and since they are guests, they are not permanent members. However, what if they are going to occupy months at a time, and use the rental property?

While it may not affect you as a lessor, society might have objections to it, and the usage of your rental accommodation might increase, thereby enhancing its wear and tear. Hence, the lease agreements should carry the detailed account of occupancy limits.

This detail will give you a legal right to vacate a tenant who has brought in a relative or friend and sublet a part of your apartment.

Movable assets within the property and its conditions

With so many floating populations in big cities, it becomes impossible to take care of every single detail when it is being rented out year after year. However, if you want to safeguard the movable assets inside the property, such as ceiling fans, furniture, wardrobes and so on, make a list of all the items, and put it in the lease agreement stating their conditions and what will be the fine charged in case of any damage. This way, even though you can give leeway to some wear and tear on usage, any major damage will be covered legally in the document and you can recover their loss/damage from the last rent.

Maintenance and repair

It is always a major bone of contention between the lessor and the lessee regarding the maintenance and repair of the property. A tenant, who has lived in the property for one year, might want to apply a new coat of paint, repair the movable assets or a wardrobe, or might just require general maintenance before renewal or in-between the tenancy.

As a lessee, you might want to ensure the terms are clear regarding the maintenance issues and the lessor will take care of it. The lessor can, in turn, suggest such possibilities and agree upon a middle ground to seek out any such issues. Putting these up in the lease agreement might help both parties achieve a better understanding.

Rental deposits

While it is a norm in India to deposit a security amount before occupying the property, the terms and conditions or the percentage of such deposits differ in various States. In cities like Bangalore or Chennai, where there is a lot of floating population, the amount ranges from ten to twelve months rent in advance.

This might work out to be huge in the case of Mumbai, where rental prices are quite exorbitant. Hence, whatever the conditions may be in your area, a lessor and lessee can come to an agreement on this, and put it up in the document stating the:

What are the conditions for returning it back to the lessee by the lessor, at the end of the tenancy: Since the amount involved is quite substantial, a proper agreement needs to be reached and signed to avoid any hassles at the end of the tenancy.

Miscellaneous Clauses

There are several other clauses depending upon where your property is, and also your personal conditions. For instance, if you are renting a property within a society, which has a clubhouse and a pool, you might need a signed agreement from the owner for its usage. Society might protest otherwise, and can charge you extra for the same.

Similarly, many are averse to bringing pets or even food preferences. Mentioning them in the miscellaneous clause may put an end to the hassles which may arise later, during the period of tenancy.

Any other conditions such as disruptive behaviour of the tenants or the noise created can be put on paper to avoid tiff with the neighbours.

While all the above-mentioned details may or may not figure out in one single lease agreement, having them in your mind, while making the agreement may prove useful and avoid legal hassles.

All the above-mentioned conditions apply for both the lessee and lessor. As a tenant, however, ensure that you are renting the property out from its legal owner only, and not a third party. Even though you have dealt with the initial formalities with an agent, it is essential that the owner be involved (or a legally authorized signatory) during the signing of the lease agreement to make it legal.

Difference Between a Lease and A Rent Agreement:

Both lease and rent agreements are between a lessor and a lessee. However, a lease agreement is made when the lessor provides the use of a property for a set period of time, and a one-time payment is made out by the lessee, after signing in the contractual agreement.

In the case of rental agreements, the contract states the monthly rent to be paid, the date on which it needs to be done as well as the tenure of occupancy. While there are no major differences between the two, a rental agreement usually is made on a month-to-month basis, and the tenure can be extended with the conditions given.


A lease agreement is made for extended periods, sometimes even up to five years, and extensions require a fresh agreement to be documented. Both are legally authorized and carry a great value when you need to contest a court case: on the rights of occupancy or on any other issues relating to the said property. If you have difficulty in registering for a lease agreement all you have to do is to get the help from an expert who knowa every legal ways to get it done for you. Having the best and most trusted legal service provider in India, Vakilsearch can guide you through any legal process.

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