Know All About Lease Deed in India

Published On: Jun 2, 2023Last Updated: Jul 31, 20235.9 min read

When the owner of an asset, usually property or vehicles, lends it to another person for use, they enter into a ‘Lease Deed’ to set out the terms of the exchange. Lease Deeds are often considered to be the same as a rent agreement. In most parts, both agreements are similar. However, deeds usually have a longer-term period than a rent agreement. Most formats of deeds have a term of more than one year.  Nowadays it’s easy to get lease deed draft online. Yet, it’s extremely important to have an understanding of the clauses of any legal agreement that you’re about to enter!

Meaning of Lease Deed

As per the governing laws, a lease means a transfer of the right to enjoy a property for some time, in perpetuity. This transfer happens in exchange for a consideration, referred to as a ‘Premium’ or ‘rent’. The consideration here can sometimes also be non-monetary, such as services, or crops in exchange for a property. 

Further, ‘Lease Deed’ means the legal agreement that governs all the terms of a lease. A lease agreement draft provides the rights and obligations of two parties, namely, a lessor and a lessee. These lease deeds usually cover the lease of commercial properties since they are for longer periods. Now that we have clarity on the meaning of a lease deed, let’s dive into the different clauses of a lease agreement format. 

Important clauses of a Lease Deed 

A well-drafted lease deed format protects the rights of both the lessor (landlord) and the lessee (tenant). Before you enter into any lease agreement for either a commercial or residential property, do ensure that you have a clear understanding of the following clauses: 

Details of Parties

Parties to a lease agreement mean the person giving their property, i.e., the lessor, and the person who is getting the lease on a property, i.e., the lessee. The basic details such as the name, address, age, and occupation must be mentioned in the lease agreement. 

Property Description

The deed must include a detailed description of the property, including the location, structure, area, furniture, etc. Having an accurate property description in the format of a lease agreement is very important as it can help in avoiding any disputes in the future. 

Duration of Lease 

The term of a lease or its duration is generally more than 12 months. However, the exact period of its validity and the other terms for renewal of a lease must be a part of the agreement.


A lease happens in exchange for consideration. The deed should mention the amount of consideration, the terms of payment, the mode of payment, and also the consequences of non-payment of consideration. Here, the consideration amount is usually referred to as a ‘rent’ or ‘premium’. 

Also Read: Sale Deed: Format, Meaning and Purpose

Notice of termination, termination or Exit Clause

Even though the term of the lease is pre-decided, there may arise situations where either party wishes to terminate the agreement. In such a situation the desirous party can terminate the contract by providing written notice for the period as specified in the lease agreement. With that said, the termination clause also states the situations under which either party can opt for termination, such as any breach of the contract, violation of any laws, etc.

Sub-lease means when the lessee decides to lease parts of his right in the leased property to a third party, referred to as the sub-lessor. This characteristic applies to lease deed drafts because a lease entails the transfer of a right in the property for a definite time. However, it is at the discretion of the owner of the property, ie. the original lessor whether they allow sub-leasing or sub-letting of their property to any third party. All terms related to this decision of the parties shall be mentioned in the lease deed. If there is no mention of a sublease clause in the deed, it is deemed that the property cannot be subleased by the lessee. 

Difference Between Lease Deed and Rent Agreement

At a glance, the two seem to be the same. However, certain points make a lease deed different from a rent agreement. 

Point of DifferenceLease DeedRent Agreement
Duration The term of a lease deed is generally more than one year.The term of the rent agreement is for less than a year, usually 11 months.
Type of transferLease denotes the transfer of the right to an interest in the property, ie, The landlord is transferring their right for a specified period.  A rent agreement does not entail the transfer of an interest in the property. It only allows the tenant to occupy the property on terms of the landlord.
Type of propertyCommercial Lease Deeds are most common.Most opt rent agreements for residential purposes.
Sub-lettingSub-leasing of property may be allowed at the discretion of the landlord.There is no such clause in rent agreement.

Types of Lease Deeds in India

Even though lease deeds are usually for commercial properties, there are times when people also opt for residential lease deeds. Let’s take a look at the different types of lease deeds: 

Commercial Lease Deed 

These are the most common types of lease deeds in India. Lease deeds make renting out commercial properties easier because it lasts longer, and the mandate of registration of lease deeds also makes it more appropriate for commercial transactions.

Residential Lease Deeds

Even though most residential properties are covered by a House rent agreement in India. Certain landlords opt for residential lease deeds. Registration of residential lease deeds is also mandatory if the term lasts for more than 12 months. 

Sub-Lease Deed

This is an ancillary agreement to the lease deed. The need for this only arises when a lessor allows subleasing of their property, and the lessee subleases it to a third party. The sublease agreement must adhere to all the terms and rules of the original lease agreement. 

Lease Deed Registration in India 

As we are aware the term of lease agreements in India is more than one year. Considering this along with the fact that the Registration Act makes it mandatory to get registration of all deeds within one year’s term. Hence, theoretically, it is mandatory to register these deeds. To register a lease deed in India you need to: 

  • Print your deed on appropriate stamp paper with due notarization; 
  • Go to the registrar’s office;
  • Submit all documents (proof of ownership, tax receipt, passport size photos and address of both parties, etc); 
  • Sign all the pages of the deed in the presence of the registrar and two witnesses. 


Lease Deeds are one of the most basic legal agreements. Lease formats are also very useful in day to day life of business owners. Getting your commercial or residential lease deed draft online from certified service providers like can help you in protecting your best interests! 

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Diksha Shastri
About the Author

Diksha Shastri

As a writer, Diksha aims to make complex legal subjects easier to comprehend for all. As a Lawyer, she assists startups with their legal and IPR drafting requirements. To understand and further spread awareness about the startup ecosystem is her motto.

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