DRAFTING OF A LEASE-DEED

Introduction:
According to Section 105 of The Transfer of property Act, 'A lease of immovable property is
a transfer of the right to use the property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised'.
Accordingly, a lease creates a right to use a property in favour of a lessee. Unless there is a
transfer of such an interest, there can be no lease.
The transferor is called the lessor, the transferee is called the lessee, the price is called the
premium and the money, share, service, or other thing to be so rendered is called the rent.
Essentials of Lease:
An instrument of lease must contain the duration of the lease, the time of commencement, the
amount of rent or premium, if any, the time of payment and the covenants between the lessor
and the lessee upon which the lease should be granted.
Period of Lease:
A lease may be from year to year, or month to month, or in perpetuity.
Leases how made:
A lease of immovable property from year to year, or for any term exceeding one year, or
reserving a yearly rent, can be made only by a registered instrument.
All other leases of immovable property may be made either by a registered instrument or by
an oral agreement accompanied by delivery of possession.
Where a lease of immovable property is made by a registered instrument, such instrument, or
where there are more instruments than one, each such instrument, shall be executed by both
the lessor and the lessee.
Key points for a lease to exist:
There should be a transfer of right from the lessor to lessee:

- The lessee should have a separate alienable interest in the property

- The interest should be in immovable property
- It should give the lessee the right to possession of the property in accordance with the
agreement
- The right to use the property should be for a certain time period
- The right should be given in return for some consideration to be paid periodically or on
certain specified occasions The underlying principle of a lease is that it is the separation of
the right of possession from ownership of property. The word 'use' used here includes
'possession' also.
A suit for eviction against a lessee does not lie so long as the lease is in existence. It is to be
noted that a mere personal right of possession of property will not constitute a lease. The
right to possess a property, which is the subject matter of a lease, should be vested in the
lessee.
When a lease is executed, the transfer that takes place is a transfer of limited right to use the
property during the period of the lease. The lessee has the right to use the property. The
ownership of the property continues to remain with the landlord.
It is to be noted that mere transfer of right of possession without a right to use is not a lease.
Similarly, a mere right to use, without the right to possession, cannot be termed as a lease.
There must be a transfer of the exclusive right to possession of the property in respect of
which the lease is created. After a lease is created, the lessor cannot reserve to himself any
share in the right of possession. The words 'transfer of a right to use the property' indicates
that all rights of ownership are not transferred.
The important points which are to be taken into consideration while drafting a lease
deed are 1. Title the lease:

At the top of the paper, write "Residential Lease" or another

appropriate title to make it clear that this is a legal contract.

2. Identify all parties to the lease agreement: Clearly list the landlord's name and
address and the tenant's name and address, making it clear who is the lessee and who
is the lessor. Include additional contact information such as occupation, age etc.

3. Describe the asset that is covered by the rental agreement: If you're writing a
residential lease, write out the complete address and apartment number of the rental
property. Describe the property's condition at the time of the rental agreement.
4. State the length of the lease agreement: This should have starting and ending dates
as well as the specific length of time in days, weeks or months that the agreement
lasts. If there is any scheduled interruption in the continuity of the usage, or if there is
an option for early lease termination, this should be specified. Most leases last three
months, six months, or a year. You also have the option of issuing a monthly or
weekly lease agreement.
5. Account for all funds associated with the lease agreement: For a housing
agreement, payment information should include the rent amount and stipulations
regarding how it should be paid. Write what day of the month the rent is due, and
where it should be sent. Specify the whether a late fee will be charged after a certain
amount of time and the amount. Describe the terms of the deposit. State the amount of
the deposit and the terms under which it will be returned. Note that the deposit won't
be returned unless the property is in good condition at the end of the lease. State how
many days after the lease is completed the deposit will be returned.
6. Assign responsibilities: State who is in charge of paying utilities (gas, water, and
electricity), taking care of trash and recycling, maintaining the outdoor areas on the
property, and any other responsibilities specific to the rental property. Check into local
laws to find out how to parse out the responsibilities. In some cases the landlord is
legally obligated to pay for gas and water, while in other areas the tenant may take
care of these expenses. Outline who is responsible for making repairs, keeping
appliances in working order, and so on. Again, you should check into local laws to
determine what your role should be. In most cases the landlord is responsible for
keeping the living space safe and functional. State that the tenant is responsible for
informing the landlord about problems with the rental property, including safety
concerns, lost keys, and so on.
7. Outline the specific obligations of the tenant under the lease agreement: This
should typically state that the tenant is responsible for adhering to all applicable laws,
that the tenant agrees to only utilize the property in manners for which it is intended,
and that the tenant is responsible for any tickets or fines received for failing to do so.
State that the rental is to be used for residential purposes only. Write out what the
tenant should do if something on the property gets damaged. Specify whether the
tenant is allowed to make changes to the rental. For example, if the tenant wants to

paint the walls, install a cable modem, and so on, you should state in the lease
whether these changes are allowed. Decide whether pets are allowed and specify the
rules regarding them in the lease. You might require an additional, nonrefundable pet
deposit for each animal based on animal weight. You might state that pets will be
allowed indoors or must stay outdoors. You might specify actions that you will take if
the pets are not treated humanely. Carefully consider all aspects of allowing pets on
your property. Determine whether the tenant is allowed to sublet the unit, and outline
the process for doing so.
8. Specify the consequences for defaulting on payments or violating the terms of the
lease agreement: This should detail the action which will be taken by the landlord in
the event that the tenant fails to make the agreed upon payments or is found to be
violating other assigned responsibilities. Detail the remedies available to you as the
landlord, including eviction, repossession and/or court action.
9. Include spaces for both parties to sign and date the agreement: Both the landlord
and tenant must sign the agreement in order for the contract to take effect.

SAMPLE LEASE DEED

This deed of lease made the _________________ day of ___________years between
Sri./Smt._____________etc., (herein after called the Lessor) of the one part and
Sri./Smt.____________ etc. (hereinafter called the Lessee) of the other part.
Whereby it is agreed as follows:
1. The Lessor hereby demises to the Lessee all that dwelling house with the land fully
described in the schedule hereto together with all out-houses, pucca well, motor
garage, kitchen, pathways, passage, garden and other appurtenances thereof, situated
at _____________ to hold the same to the Lessee from ___________ day of _______
for the term of ______ years (or, year to year) paying therefor during the said term the
monthly rent of Rs._________ (Rupees _____________ only) payable on the first day
of the month succeeding that for which the rent is due;
2. The Lessee hereby agrees that he will during the said term (tenancy) pay all rates;
taxes and other charges excluding the house tax which now are or may hereafter
becomes payable in respect of the demised property;
3. The Lessor hereby agrees as follows:-

(i) That the Lessor shall keep the premises in good and substantial repairs during the
said term and shall annually white-wash and do all necessary repairs to the out-houses
and demised premises and on the Lessee giving the Lessor notice in writing of any
special decays, defects and want of separation the Lessor will within one calendar
month from the receipt of such notice repair and amend the same;
(ii) That the Lessor shall repair when necessary, the well, the passages, pathways and
the road connecting the provincial road with the bungalow hereby demised and shall
get the well cleaned at least once a year.
4. Provided always and it is hereby agreed as follows:
(i) That whenever any part of the rent hereby reserved shall be in arrears for_____
months after due date or there shall be a breach of any of the covenants by the Lessee
herein contain the Lessor may re-enter on the demised premises and determine this
lease.
(ii) The tenancy hereby created shall be determinable at the option of the
Lessor/Lessee (or either party) by giving to Lessee/Lessor (or, the other party)
______________ calendar months notice in writing.
5. It is hereby agreed between the parties that in respect of the demised premises the
parties hereto shall respectively have all the rights and be subject to all the liabilities
of a lessor and of a lessee as set forth in Section 108 of the Transfer of Property Act,
1882, except Clause (m) thereof which is hereby excluded.
6. It is hereby agreed between the parties as follows:
(i) That any demand for payment or notice requiring to be made upon or given to the
Lessee shall be sufficiently made or given if sent by the Lessor or his agent through
the post by registered letter addressed to the Lessee at the demised premises (or,
at_______), and that notice requiring to be given to the Lessor shall be sufficiently
given if sent by the Lessee through the post by registered letter addressed to the
Lessor at his usual or last known place of residence or business (or; at_______) and
that any demand or notice sent by post in either case shall be assumed to have been
delivered in the usual course of pose.
(ii) That wherever such in interpretation would be necessary in order to give the
fullest scope and effect legally possible to any covenant or contract herein contained
the expression the Lessor herein before used shall include the owner for the time
being of the Lessors interest in the demised premises and the expression the Lessee

herein before used shall include his heirs, executors, administrators and permitted
assigns.
In witness whereof the parties have put their signatures hereunder on the day and the
year first above -written (or, on the respective date mentioned against their signatures)
SCHEDULE (Leased under this deed)
All the piece and parcel of immovable property bearing No.____________*
Measuring _______________
Bounded by:On the East :
On the West :
On the South :
On the North :
Market value of the property leased under this deed is Rs._____________
(Rupees____________________________________only).
The Stamp duty is paid as per Article 30 of the Schedule to the Jharkhand Stamp Act.
IN WITNESS WHEREOF the parties herein have affixed their respective signatures
to this deed at _______________ on this ______________ day of ______________
year in presence of the witness:
WITNESSES:
1. ---------------------------------------------------------------LESSOR
2. ----------------------------------------------------------------LESSEE
[*Full details of the property number such as Khata number, street/road with
reference to the local authority records and boundaries shall be furnished. If the
property leased is a Flat / Apartment details of the property on which the Flat /
Apartment is constructed, flat number, floor number, name of the apartment etc., full
details of the property so as to identify shall be furnished.]