April 2023

Week Duration: 09/04/2023 to 16/04/2023

Exercises on Lease Agreements

Learning Objectives:

- To understand the essentials of a Lease Agreement.

- To learn how to draft key clauses of the Lease Agreement.
- Understand the Contact enforcement of the Lease Agreement.
- Learn about the documents that need to be executed and taken care of.

Points to be kept in mind while attempting this Exercise:

- This exercise shall help you analyze & understand the clauses of the Lease
Agreement.
- It is an attempt to help you understand the nuances of drafting, reviewing and
vetting the above-mentioned agreement.

Reference Material:

❖ Module - Introduction to Contract Drafting

- PPT - Lease agreements

❖ Module- Templates

- Residential lease

- Corporate lease

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Factual Scenario:

Raghav, along with his friend Ramesh , have started ‘Changing Homes and Co.’, a
small startup based out of Mumbai. This startup purchases old buildings and
converts them into eco-friendly co-working spaces tolerant of environmental needs
and concerns. They then lease these spaces to companies and individual
practitioners looking for a place to work out of. The consideration amount in such
transactions is decided as per the number of cabins leased by a person or a
company.

They recently came across a building situated in Bandra that had some gorgeous
views of the sea. They performed their due diligence and came to know that this
building was owned by one Mr. Gonsalves, who was actually looking for a buyer for
the said property. Jumping at the opportunity, Changing homes and Co. decided to
take up a meeting with the owner and discuss the potential sale. In January 2022,
the company concluded the purchase of the property in lieu of Rs 5,00,00,000/-
(Rupees Five Crores Only) paid as consideration, and started renovating it as per
their business model.

By November 2022, the building was ready to be leased out as a co-working space.
It was named ‘Co-Changer’ and the consideration amount for leasing out office
spaces was kept as Rs 8,00,000/- (Rupees Eight Lakhs Only) per cabin for the first
3 years to be paid in lump sum by the lessee and an amount of Rs 2,00,000/-
(Rupees Two Lakhs Only) per annum to be paid by the lessee from fourth year
onwards.

Raghav has approached you to draft a standard lease agreement that they can use
for leasing these eco-friendly office spaces. Please ensure that the lease
agreement is a template that they can use for all their transactions and hence,
business details need to be incorporated in it correctly, especially the
understanding related to rights of the parties and ownership.

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Exercise 1:

Based on the scenario given above, you are required to draft the following clauses:

a. Draft the Title, Names and Descriptions of Parties along with the Recital
of the Agreement.

[Hint: You are required to name the agreement, Give out the names and
description of parties (you are free to assume details of parties in resp of
their age, address etc) and give a background of how the parties have come
together to enter into the agreement]

b. Obligations clause

[Hint: While drafting the said clause, lay down the key obligations on both the
lessor and the lessee. Think in terms of repair, taxes, maintenance etc]

c. Consideration clause

[Hint: You are required to lay down the fee/rent in respect of the lease
agreement. Lay down the time periods when such amounts will be due,
Interest levy in case of delayed payment, whether delayed payments will
amount to breach etc.]

d. Rights of the parties

[Hint: Does the landlord have the right to inspect the leased property at any
given time?]

[NOTE:

- Marks for draft of each clause- 2 marks;

- Using proper formatting- 1 mark;
- Grammar- 1 mark]

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________________________________________________________

Exercise 2:

You are now further required to draft the following clauses:

a. Representations

[Hint: You are required to lay down representations that both the lessor and
lessee will make to each other. Think in terms of title of the property, their
rights to enter into the agreement etc!]

b. Alterations by

[Hint: Detail out whether any right for alterations has been granted or not.
Who will bear such expenses etc.]

c. Term and Renewals

[Hint: Here you are required to lay down the term i.e. the number of years/
months of the agreement. Also answer whether the agreement is renewable
or not?]

d. Termination

[Hint: In a termination clause, you are required to mention the circumstances

under which the agreement may be terminated.]

[NOTE:

- Marks for draft of each clause- 2 marks;

- Using proper formatting- 1 mark;
- Grammar- 1 mark]

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___________________________________________________________________

Try this Exercise and expand your professional reach!

Share your thoughts on “Enforcement of Lease Agreement in India” based on

your research during attempting this above-mentioned exercise.

Kindly share your views on a Linkedin post and tag Ramanuj Mukherjee, Abhyuday
Agarwal, Yash Vijayvargiya, Ruchika Motwani, and Nidhi Dayani. The purpose of
tagging is for better reach only and is hence, optional.

___________________________________________________________________

Important Contact Points:

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especially content and classes.

● Nidhi Dayani, Course Anchor: (calendly.com/nidhi_d)

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● Abhyuday Agarwal: (abhyuday@ipleaders.in / abhyuday@lawsikho.in)

● Ramanuj Mukherjee: ramanuj@ipleaders.in

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