Office leasing guide
Office lease terms to agree in Mumbai
Office leases run for years. These are the points tenants and owners in Mumbai usually settle in writing, and where disputes tend to start.
Office lease terms to agree
Office leases run for years and the terms vary from deal to deal. Settle these points in writing before you sign.
Lease length and lock-inOffices are usually taken for 3 to 9 years, often as 3 + 3 + 3. A lock-in period, commonly 1 to 3 years, means leaving early still costs the rent for the rest of the lock-in.
Leave and licence or leaseIn Maharashtra a leave and licence agreement can be signed for up to 5 years at one go. Anything above 5 years is a lease agreement, not a leave and licence agreement.
Rent escalationUsually about 5% a year, or 15% every 3 years. Agree the rate and the date it starts.
Security depositUsually 3 to 6 months' rent and negotiable, interest-free, refunded at handover less agreed dues. Write down the refund timeline.
Rent-free fit-out periodFor bare or warm-shell offices, owners often allow a rent-free period for interiors. Agree how many days, and from when.
Running costsAgree who pays maintenance or CAM, property tax, electricity and the building's charges. GST on rent applies where the owner is GST-registered.
RegistrationIn Maharashtra the agreement must be registered, whatever its length. Stamp duty and registration costs are usually shared or borne by the tenant; say which.
"As is where is" handover is where most office disputes start. Record the office's exact condition on the day you take it, and how it must be returned.
- A signed inventory: workstations, cabins, chairs, ACs, lights, UPS and pantry fittings, with dated photos.
- Whether you must restore it to bare shell at exit, or may hand it back as is.
- Who repairs what during the lease: ACs, plumbing, electricals, seepage and the building's common areas.
- Who owns interiors you add, and whether you can remove them when you leave.
Usual market practice in Mumbai, not legal advice. Your lease deed decides; check it with your advocate.