LAW OF PROPERTY Question and Answer

Question

Anunda and Murage intend to enter into a lease agreement regarding business premises.
Explain to Anunda and Murage the contents of a standard lease agreement.

Answer

Contents of a standard lease agreement

• Details of the lessor and lessee, and their addresses
• Details of property leased – its location and identification
• Declaration by the lessor that he is either the owner of the property or is duly authorized by the owner to enjoy the property on lease
• The effective date of commencement of the rent agreement and the duration
• Term of the lease
• The lease rent and the mode of payment
• Security deposit amount paid, whether it is interest-free or not, and the circumstances when it is refundable
• Advance rent payable, if any, and the mode of its adjustment
• Rent escalation clause – when can the rent be increased and at what rates
• Who will bear the routine repair and maintenance expenses – both for minor and major repairs and what exactly are minor and major repairs
• Whether the fixtures and fittings would be provided by the lessor
• What are the grounds for termination of the agreement
• Notice period required for termination of the lease
• Renewable clauses