How to read a commercial lease deed — 10 clauses that matter | 99Land

Escalation, lock-in, exit clause, common-area maintenance — the 10 clauses you have to read slowly before signing a commercial lease.

A commercial lease in India runs 25-40 pages. Here are the 10 clauses that tenants and landlords fight about most, and what's reasonable in each.

The 10 clauses

Tenure — 5-9 years. Longer = better for tenant, lower turnover risk for landlord.
Lock-in — 36 months is market. Anything over 60 is aggressive.
Escalation — 15% every 3 years OR 5% annually. Standardise on one.
Security deposit — 6-10 months. Interest-free, refundable at exit.
CAM (common-area maintenance) — ₹20-35/sqft/month. Pass-through, not profit.
Exit / termination — 3-6 month notice.
Force majeure — post-COVID, very important. Include pandemics and lockdowns.
Sub-lease / assignment — tenant should have right to sublease subsidiaries.
Repairs & maintenance — landlord for structure, tenant for interiors.
Registration — mandatory if lease > 11 months. Stamp + register.

A property transaction in India touches a lot of hands. Here's what each party should insist on before money moves.

Verify title through a 30-year EC (Encumbrance Certificate) and cross-check the mother deed.
Confirm RERA registration (where applicable) — the RERA number should match the one on the state RERA website.
Never transfer a token amount on WhatsApp alone; insist on a receipt and a simple written agreement.
Walk the property in person. Photo-only deals are a common vector for listing fraud.

Keep originals in a locker. Only ever share certified copies with prospective buyers.
Insist on payment via cheque / NEFT / RTGS — avoid cash-heavy deals, especially above ₹2 lakh (20,000 cash cap for each leg under Section 269ST).
Never hand over vacant possession until the sale deed is registered and the registration receipt is in your hand.

Register under the state RERA (where brokering RERA-covered projects) and display your registration number on listings.
Keep a written, dated engagement letter with the client covering brokerage %, exclusivity and a cancellation clause.
Do a KYC on both sides before the first site visit — PAN + Aadhaar, photo ID match — and hold a copy on file.
Never pocket earnest money directly; let it flow buyer ↔ seller and invoice the brokerage separately.

Update your property tax every year — BBMP / MCD / BMC arrears follow the property and surface at sale time.
On rental, include a 2–3-month notice period, a detailed inventory with photos, and a clause on painting + deep-cleaning at exit.
Pay the rental TDS if you're a tenant paying over ₹50,000/month (Section 194-IB). Owners should chase the Form 16C from their tenant.

Final tip: when in doubt, walk away. The best real-estate deals are the ones you don't rush.