If you've landed on this blog, you're likely either in the midst of leasing an office or exploring the possibility of leasing one in the future.

Documents form an essential part of the commercial leasing process. These papers, from lease agreements to occupancy certificates, establish the terms and obligations for both tenant and landlord.

In theory, there are actually a lot of documents that are involved in the process of leasing but in practice, the main documents that generally come up are a lease Agreement, Leave and Licence agreement, GST Licence, Company Registration Certificate and Letter of Intent.

P.S. This information is sourced from our kickass relationship managers.

Let’s do a deep dive into the essentials first.

But before that,

Why is documentation important?

2 reasons -

• Legal Protection

  • Thorough documentation is crucial to mitigate potential legal issues. Solid records demonstrating adherence to eviction procedures provide a strong defence against tenant disputes.

• Peace of Mind

  • Maintaining thorough documentation enhances peace of mind, ensuring you have taken the necessary financial and legal steps to protect yourself in property management.

Now that we have cleared that, let’s wrap up the documents one by one. Beginning with,

What is an office rental agreement?

Finding a good place for your office is a huge task in itself.

Let us say you've finally found the perfect office space to rent for your growing business. The location is ideal, the amenities are top-notch, and the price fits your budget.

But hold on!

Before you rush into anything, there's one crucial document that can save you from potential headaches and disputes: the comprehensive office rental agreement.

An office rental agreement, also known as a lease agreement or tenancy agreement, is a legally binding contract between a landlord and a tenant that governs the terms and conditions of renting an office space. It outlines the rights, responsibilities, and obligations of both parties involved in the rental arrangement.

Sounds pretty neat hm? No wonder it ranks number one on the list of most important commercial leasing documents.

Next on our list is,

Leave and Licence Agreement

These agreements serve as a legal framework to protect the rights and interests of both the licensor and licensee during the tenancy.

Unlike a lease agreement, which typically grants more long-term rights and obligations to the tenant, a Leave and License Agreement grants a temporary licence to use the property without conferring any ownership rights. It provides more flexibility for the licensor to regain possession of the property after the licence period expires.

Usually, this agreement is made for 11 months.

While Leave and Licence Agreements and Lease Agreements may seem similar, they differ significantly.

Moving on further,

Landlords often seek insights into the tenant's profile to make sure their business is legit. Two documents used for such identification are the registration certificate and GST licence.

Most business owners know these documents very well. These are the first documents a business has to generate before starting operations.

GST License

On July 1, 2017, the Indian Government initiated a new act, termed the Goods and Service Tax Act (GST Act). The act was officially passed on March 29 of the same year in the Parliament.

GST is an indirect tax that was formed to subsume other indirect taxes in India and create a single taxation regime for ease of collection.

GST registration has become mandatory for businesses with an annual turnover of Rs. 40 Lakh and above. In the North East and Hill states, registration is compulsory for companies earning more than Rs. 10 Lakh yearly revenue.

The GSTIN registration process is very easy and will hardly take 2-6 working days to complete. To know more about the types of GST and the process of registration, click here.

Registration Certificate

Registration Certificate a.k.a the certification of incorporation marks a company’s legal birth as a distinct entity. The certificate of incorporation acts as compelling confirmation of the regularity of the incorporation of the company.

A company can immediately commence its business once its certificate of incorporation is issued. Thus, the certificate of incorporation is conclusive evidence of the existence of a company.

The final document in our long list of documents is the letter of intent. A document that quite literally, seals the deal.

What is a letter of intent?

At its core, the letter of intent serves as a declaration of intent. It says, "I am serious about this transaction, and here are the terms and conditions I propose." By formally putting this intent into writing, it establishes a level of commitment and professionalism in the negotiation process.

For buyers and potential tenants, the LOI is a powerful tool. It signals to the seller or lessor that they are not mere window shoppers but legitimate contenders. This declaration is particularly crucial in competitive real estate markets, where multiple potential buyers may be bidding for the same property. It helps your offer stand out and assures the seller of your seriousness and capability.

That was a lot of documentation.

Apart from these, there are various other non-essential documents that might be asked for in some specific transactions.

What! More documents? I promise you, there’s only 4 more.

• Occupancy Certificate

  • In some cases, an occupancy certificate from the local municipal authority may be required, ensuring that the building complies with safety and zoning regulations.

• No Objection Certificate (NOC)

  • A document from the landlord stating that they have no objections to the tenant using the premises for the specified commercial purposes.

• Common Area Maintenance (CAM) Charges Agreement

  • If applicable, details of the agreement regarding the tenant's responsibility for common area maintenance charges.

• Parking Agreement

  • If parking spaces are allocated, a separate agreement detailing the terms and conditions related to parking.

And…that’s a wrap.

I hope you have successfully gained a lot of clarity after going through this blog. This process can be extremely time-consuming and it’s always recommended to hire a legal professional to supervise these processes.

Editor's note: This blog was originally published on March 10, 2024 but was recently updated on Mar 22, 2024.