Need a commercial lease agreement format? This page explains when you need it, what it must contain and how to make it valid, step by step. You can also get CIVL’s ready-to-use commercial lease agreement format as an editable Word file and PDF.
Quick answer
A commercial lease agreement rents out a shop, office or warehouse for business use. A lease for more than one year must be registered, and it is printed on stamp paper as per your state’s rates. It is also the address proof most businesses use for GST and other registrations.
What is a commercial lease agreement?
A commercial lease sets out the terms on which a business occupies premises: rent, term, lock-in period, escalation, deposit, permitted use, fit-outs and who pays which charges. Leases are governed by the Transfer of Property Act, 1882 (Section 105 onwards) and the agreement itself.
Commercial leases are usually longer than residential ones, so registration under Section 17 of the Registration Act, 1908 is often compulsory. If the landlord is registered under GST, GST is charged on commercial rent.
When you need it
- You are renting a shop, office, clinic, godown or showroom.
- You need address proof for GST, Shop and Establishment, FSSAI or trade licence registration.
- A bank or investor asks for proof that your business premises are secured.
- You are renewing or extending an existing commercial tenancy.
Stamp duty, notarisation and registration
| Requirement | What applies | Notes |
|---|---|---|
| Stamp paper / e-stamp | Required | Duty depends on the state, term, rent, deposit and any premium. |
| Notarisation | Optional | Not a substitute for registration. |
| Registration | Required for more than 1 year | At the Sub-Registrar; both parties or their authorised signatories attend. |
| Witnesses | Two | Needed for registration. |
Stamp duty on leases varies widely between states and is often higher for longer terms. Check your state’s stamp schedule before finalising the term.
What the commercial lease agreement must contain
- Names and details of the lessor and lessee; for companies and firms, the authorised signatory and board resolution or authority letter.
- Full description of the premises, area, parking and common areas.
- Term, lock-in period for both sides, and renewal option.
- Rent, escalation (for example a fixed percentage every year), due date and GST, if applicable.
- Security deposit and refund terms.
- Permitted use, signage, fit-out rights and restoration when vacating.
- Maintenance charges, electricity, property tax and insurance.
- Termination, notice period, consequences of breach and dispute resolution.
- Landlord’s consent for using the address for GST and other registrations.
How to make it valid: step by step
- Check the title. Ask for the landlord’s ownership document and confirm there is no dispute or mortgage restriction.
- Agree the commercial terms. Settle rent, escalation, lock-in, deposit and fit-out periods.
- Fill in the format. Use exact legal names. For a company, use its registered name and CIN.
- Pay stamp duty. Buy e-stamp or stamp paper of the correct value for your state.
- Sign and register. Sign before two witnesses and register at the Sub-Registrar if the term exceeds one year.
- Use it for registrations. Upload the lease with the landlord’s utility bill for GST or other registrations.
Common mistakes to avoid
- Unregistered long lease. An unregistered lease of over a year cannot prove the lease terms in court.
- Unclear lock-in. State whether the lock-in binds the tenant, the landlord, or both, and what happens on early exit.
- No GST clause. Say whether rent is inclusive or exclusive of GST.
- No address-use consent. Without it, the landlord may later refuse to support GST verification.
- Ignoring restoration costs. Agree in advance what must be removed or restored when you vacate.
CIVL format
Get the ready-to-use commercial lease agreement format
- Editable Word file and a print-ready PDF
- Notes on how to fill every blank
- Lock-in and escalation clause options
- Board resolution format for company tenants
- Delivered to your email after payment
Price: ₹199 · Coming soon
Want it done for you?
Registering for GST at these premises? AdvisoNet, CIVL’s sister service run by Company Secretaries and Chartered Accountants, can handle it for a fixed fee.
Frequently asked questions
Is registration compulsory for a commercial lease?
Yes, if the term is more than one year or the lease is from year to year (Section 17, Registration Act, 1908).
Is GST payable on commercial rent?
If the landlord is registered under GST, GST is charged on rent for commercial property. Check the current rate on the GST portal.
What is a lock-in period?
A period during which neither party (or only one party, as agreed) can end the lease without paying the rent for the remaining lock-in.
Can I use a commercial lease as GST address proof?
Yes. A rent or lease agreement, along with an electricity bill or tax receipt of the premises, is commonly used as proof of the principal place of business.
Where can I get a ready-to-use commercial lease agreement format?
CIVL’s commercial lease agreement format comes as an editable Word file and a print-ready PDF, with notes on filling every blank and checking your state’s rules. Use the button above to be told when it is available.