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Commercial Rent Agreement

વ્યાપારી ભાડા કરાર

A shop, office, godown or showroom is not a flat, and handing a commercial tenant a residential template is a false economy that shows up years later.

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What makes a commercial agreement different

Stamp treatment differs, and so does almost every operative clause. A commercial letting has to deal with things a residential tenancy never raises:

  • Permitted use, defined narrowly. This is the clause that stops a godown becoming a workshop, or a quiet office becoming a food business with a chimney. Name the business.
  • GST on rent — whose liability, and whether the quoted rent is inclusive or exclusive. Get this wrong and it is argued about every month.
  • Fit-out and reinstatement. What the tenant may build, who owns it at the end, and what condition the premises come back in. A tenant who has spent heavily on fit-out will want a matching lock-in.
  • Lock-in, on both sides. The tenant's investment justifies security of term; the landlord's void risk justifies a minimum period.
  • Assignment and change of control — what happens when the business is sold. A tenancy that cannot move with the business destroys value the tenant thinks he has.
  • Signage, parking, loading, hours of access, and who deals with licences attaching to the premises.
  • Statutory compliance and hazardous materials for industrial or godown premises.

The one-year line decides everything

Section 17(1)(d) of the Registration Act, 1908 makes registration compulsory for a lease of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent. Section 18(c) puts a term not exceeding one year in the optional list. That single distinction is the entire reason the eleven-month agreement became standard practice in Gujarat — not custom, not a loophole, but statute.

Watch the third limb: "reserving a yearly rent".

An agreement can be caught even where the term is under a year, if the rent is reserved annually. A draft that says "annual rent of ₹1,20,000 payable in monthly instalments" may have created a lease reserving a yearly rent and walked into section 17(1)(d) despite an eleven-month term. Write "monthly rent of ₹10,000". Downloaded templates get this wrong constantly.

If the document should have been registered and was not, section 49 bars it from being received as evidence of the transaction it records. Notarisation does not cure that. Notarised vs registered, in full →

Commercial tenants routinely want longer than a year. That is a legitimate commercial need — it simply means the Sub-Registrar, not the notary. We will tell you which side of the line your term falls on before drafting, and prepare it for registration where it belongs.

On stamp duty.

We do not publish duty figures on this website. The Gujarat Stamp Act, 1958 was amended in 2025 and several articles were restructured; a rate printed on a web page goes stale and costs somebody money. As a Government authorised e-Stamping centre we confirm the duty currently prescribed for your specific document and issue the e-stamp against it, at face value. The notarial fee is separate and capped by law — ₹35 to attest execution, ₹35 to administer an oath or take an affidavit, under Rule 10(1) of the Notaries Rules, 1956. The full fee table →

Drafted here, in Gujarati or English

Drafted by an advocate of 35+ years rather than filled into a downloaded template, e-stamped at a Government authorised centre, and notarised in the same visit. If the parties read Gujarati, the document is drafted in Gujarati — not translated out of an English form, because legal Gujarati has its own settled vocabulary and a literal translation frequently means something looser.

What to bring

  • Photo ID and constitution documents for both parties
  • Ownership proof for the premises
  • Exact premises details including area and city survey number
  • Agreed rent, deposit, term, lock-in and escalation
  • The nature of the business to be carried on
  • Any fit-out or alteration the tenant intends

Related

Common questions

Is a commercial rent agreement different from a residential one?

Materially — in stamp treatment and in content. Permitted use, GST on rent, lock-in reflecting fit-out investment, reinstatement, and assignment on a sale of the business are all live issues that a residential template does not address at all.

We want a five-year term. Can it just be notarised?

No. Section 17(1)(d) of the Registration Act, 1908 makes registration compulsory for a term exceeding one year, and section 49 would bar an unregistered document from being received as evidence of the transaction. A five-year letting goes to the Sub-Registrar.

Who pays the GST on commercial rent?

That is a matter of contract between you, and it must be written down. What causes disputes is an agreement that states a rent figure without saying whether it is inclusive or exclusive of GST, and without saying who bears any change in rate.

Not sure which document you need?

Tell us what the office, bank or court asked for. We will name the exact document, the stamp value and whether notarisation is enough — before you pay anything.

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