LAW OF PROPERTY Question and Answer

Question

Anunda and Murage intend to enter into a lease agreement regarding business premises.
Explain to Anunda and Murage the contents of a standard lease agreement.

 

Answer

Contents of a standard lease agreement

  • Details of the lessor and lessee, and their addresses
  • Details of property leased – its location and identification
  • Declaration the lessor that he is either the owner of the property or is duly authorized the owner to enjoy the property on lease
  • The effective date of commencement of the rent agreement and the duration
  • Term of the lease
  • The lease rent and the mode of payment
  • Security deposit amount paid, whether it is interest-free or not, and the circumstances when it is refundable
  • Advance rent payable, if any, and the mode of its adjustment
  • Rent escalation clause – when can the rent be increased and at what rates
  • Who will bear the routine repair and maintenance expenses – both for minor and major repairs and what exactly are minor and major repairs
  • Whether the fixtures and fittings would be provided the lessor
  • What are the grounds for termination of the agreement
  • Notice period required for termination of the lease
  • Renewable clauses
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