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
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