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Commercial lease checklist: 10 things to check before you sign
For an office, shop, showroom, warehouse, factory or restaurant space anywhere in India. Take it to the site visit and tick each one off before you pay a token.
Download the one-page PDF- 1
The area you are paying for
Ask which measure the quote uses: carpet, built-up or super built-up. Get the carpet area in writing, then measure it yourself on site. Two spaces with the same quote can differ by 15% or more in usable floor.
Read: Carpet vs built-up vs super built-up area - 2
Your real monthly cost
Add the lease amount, common area maintenance, parking, power backup and 18% GST. Find out whether you can claim the GST back as input tax credit, because that decides whether it is a real cost.
Read: GST, TDS and stamp duty on a commercial lease - 3
Lock-in and tenure
How long you cannot leave, and how long the lease runs. Match both to how long you need to recover what you spend on the fit-out.
Read: How to negotiate a commercial lease - 4
Annual escalation
The yearly increase, and whether it applies to the base lease amount only. Small percentages compound over a long lease, so model the final year as well as the first.
- 5
Security deposit and its refund
How many months, whether it earns interest, and exactly when and how it is returned. Deductions should be allowed only for documented damage or unpaid dues.
Read: Security deposits and maintenance charges - 6
Fit-out period
Weeks without a lease amount while you set up the interior. Ask for it in writing, counted from handover of the keys, not from signing.
- 7
Approvals for the building
Title or allotment papers, the occupancy or completion certificate, the fire NOC, and confirmation that the permitted use matches your business.
Read: Documents required to lease commercial property - 8
Power, water and services
Compare the sanctioned load on the latest electricity bill with what you need. Check DG backup, the water source and drainage, and that there are no unpaid dues on the connections.
Read: Factory leasing: land use, power, pollution and fire checks - 9
Access and parking
Road width and gate size for your vehicles, customer and staff parking, a goods lift and loading area if you need them, and the peak-hour commute for your team.
- 10
Registration, taxes and exit
A registered lease if it runs for more than a year, who pays stamp duty, the TDS and GST clauses, and a clean exit with your deposit back if a licence is refused for a reason connected to the property.
Read: How to lease commercial property, step by step
The one number to compare spaces on
Total monthly cost divided by the carpet area you measured yourself. That is the real cost per usable sq ft. Compare every option on this number, not on the quoted rate.
This checklist is general guidance, not legal or tax advice. Confirm specifics with your lawyer or chartered accountant.