FIT-OUT AGREEMENT AND LANDLORD'S CONSENT TO WORKS
This Fit-Out Agreement and Landlord's Consent to Works is made at __________ on __________.
BETWEEN
__________, __________, having its address at __________ (the "Landlord", which expression includes its successors in interest and permitted assigns);
AND
__________, __________, having its address at __________ (the "Tenant", which expression includes its successors in interest and permitted assigns).
The Landlord and the Tenant are each a "Party" and together the "Parties".
RECITALS
A. By a __________ dated __________ between the Parties (the "Lease", which term includes a leave and licence agreement where that is the instrument named above), the Landlord granted the Tenant the right to occupy the premises described in Clause 1.1 (the "Premises") in the building of which the Premises form part (the "Building"), for a term expiring on __________.
B. The Tenant wishes to carry out interior fit-out works at the Premises to make them fit for its business, and has asked the Landlord for consent to those works.
C. The Landlord is willing to consent on the terms set out below, and the Parties wish to record the terms on which the fit-out period is granted.
D. This Agreement records that consent and those terms. It is supplemental to the Lease. It does not vary the Lease except where it says so, and it does not create, transfer or enlarge any interest in the Premises.
IT IS AGREED AS FOLLOWS
1. THE PREMISES AND THE WORKS
1.1 The Premises are: __________, admeasuring __________.
1.2 The Premises are handed over to the Tenant for fit-out as follows: __________.
1.3 The "Works" means the fit-out works described in Part 1 of Schedule A, carried out in accordance with the drawings listed in Part 2 of Schedule A as approved by the Landlord (the "Approved Drawings").
1.4 __________
1.5 Within seven days of the start of the Fit-Out Period the Parties shall jointly inspect the Premises and sign a condition report with dated photographs (the "Condition Report"). The Condition Report forms part of this Agreement and is the benchmark for any obligation in this Agreement to reinstate the Premises. If a Party fails to attend the joint inspection after seven days' written notice, the other Party's report, served on it, stands as the Condition Report.
2. THE LANDLORD'S CONSENT
2.1 The Landlord consents to the Tenant carrying out the Works at the Premises on the terms of this Agreement. This consent extends only to the Works described in Schedule A.
2.2 Any change to the Works or to the Approved Drawings requires the Landlord's further written consent, which shall not be unreasonably withheld, conditioned or delayed. Consent to a change is treated as given if the Landlord does not respond in writing within seven working days of receiving the revised drawings and a written request identifying the change.
2.3 The Landlord confirms that it has full right and authority to grant this consent. Where the Building or the Landlord's interest is subject to a mortgage, a superior lease, or the rules of a co-operative society, apartment owners' association, industrial estate authority or special economic zone authority requiring consent to tenant works, the Landlord has obtained, or shall obtain at its own cost before the start of the Fit-Out Period, every such consent, and shall give the Tenant a copy.
2.4 This consent is personal to the Tenant. It does not permit works by or for any other occupier of the Building, and it does not entitle the Tenant to carry out works to any part of the Building outside the Premises except as expressly shown in the Approved Drawings.
3. THE FIT-OUT PERIOD
3.1 The "Fit-Out Period" begins on __________ and ends on __________.
3.2 The Fit-Out Period is granted on the following basis: __________.
3.3 Subject to Clause 3.2 and to any extension under Clause 3.4, rent under the Lease commences on __________, whether or not the Works are then complete and whether or not the Tenant has begun trading. Where the Fit-Out Period is granted on a rent-free basis under Clause 3.2 and the date stated above falls on or before the last day of the Fit-Out Period, Clause 3.2 prevails and rent commences on the day after the Fit-Out Period ends. Where Clause 3.2 states that rent is payable from the start of the Fit-Out Period and the date stated above falls after the first day of the Fit-Out Period, Clause 3.2 prevails and rent commences on the first day of the Fit-Out Period.
3.4 "Landlord Delay" means delay to the Works caused by the Landlord failing to hand over the Premises in the condition stated in Clause 1.2 on __________, failing to give the access it has agreed to give, failing to supply base-building power, water, lifts or hoists, failing to obtain a consent under Clause 2.3, failing to obtain an approval it has undertaken to obtain under Clause 5.1, or failing to give a decision within a period allowed by this Agreement. The Fit-Out Period, and the date in Clause 3.3, are each extended day for day for each day of Landlord Delay. The Tenant shall notify the Landlord of the circumstances within seven days of becoming aware of them.
3.5 If the Works are not complete by the end of the Fit-Out Period, the Tenant may continue them with the Landlord's written consent, which shall not be unreasonably withheld, but the Fit-Out Period does not extend and every sum payable under the Lease continues to be payable.
3.6 Electricity, water and diesel consumed at the Premises during the Fit-Out Period are payable by the Tenant __________.
4. CONTRACTORS, ACCESS AND WORKING HOURS
4.1 __________
4.2 Before the Works commence the Tenant shall give the Landlord a list of every person requiring access to the Premises, and shall procure that each person carries the pass issued by the Landlord and produces it on demand. The Landlord shall issue passes within two working days of a complete request and shall not charge for them.
4.3 The Works may be carried out during __________.
4.4 The Tenant shall protect the common areas, lifts, lobbies, doors and finishes on the access route, keep the Premises and that route clean, remove debris daily to the point designated by the Landlord, and not store materials, plant or debris in any common area.
4.5 The Tenant shall procure that every person at the Premises in connection with the Works complies with the Building's safety rules and with all applicable safety and labour law. As between the Parties, the Tenant is responsible for the engagement, conduct, safety and payment of its contractors and their workers, and the Landlord is not the principal employer of any of them; the Tenant shall indemnify the Landlord against any claim, levy or penalty asserting otherwise.
5. STATUTORY APPROVALS
5.1 __________
5.2 The Tenant shall not commence any part of the Works for which an approval, permit or no-objection certificate is required until that approval is in place, and shall give the Landlord a copy of each approval within seven days of receiving it.
5.3 Where an application must be signed or supported by the owner of the Building, the Landlord shall sign it and provide the supporting title and approval documents within seven working days of a written request, at the Tenant's cost. Failure to do so within that period is Landlord Delay.
6. INSURANCE AND SECURITY
6.1 Before the Works commence, and until the Fit-Out Completion Date, the Tenant shall take out and maintain, or procure that its main contractor takes out and maintains:
(a) a contractors' all risks policy covering the Works, materials, plant and temporary works, for a sum insured of not less than __________ rupees;
(b) a public liability policy covering third-party death, injury and property damage, including damage to the Building and to other occupiers' property, for not less than __________ rupees for any one occurrence; and
(c) employees' compensation cover for every person engaged on the Works, as required by law.
6.2 The policies under Clauses 6.1(a) and 6.1(b) shall name the Landlord as an additional insured for its interest and shall contain a waiver of subrogation in the Landlord's favour. The Tenant shall give the Landlord copies of the policies and proof of premium payment before the Works commence, and shall not allow them to lapse.
6.3 Insurance does not limit the Tenant's liability under this Agreement, and the Tenant bears any policy excess or deductible.
7. THE TENANT'S OBLIGATIONS AND INDEMNITY
7.1 The Tenant shall carry out the Works in a good and workmanlike manner, using sound materials, in accordance with the Approved Drawings, the National Building Code of India, and all applicable fire and electrical safety requirements.
7.2 The Tenant shall not alter, cut, core or load the Building's structure, facade, roof, core or any load-bearing element except as permitted by Clause 1.4 and shown in the Approved Drawings. The Tenant shall not interfere with the Building's fire detection and suppression systems, sprinkler layout, HVAC balancing, electrical distribution or plumbing risers except to the extent the Works shown in the Approved Drawings require, and then only through a specialist approved by the Landlord for that system, such approval not to be unreasonably withheld or delayed.
7.3 The Tenant shall pay its contractors, suppliers and workmen when due, and shall keep the Premises and the Building free of any claim, charge, attachment or stoppage of work by any of them.
7.4 The Tenant indemnifies the Landlord against all loss, damage, cost, claim, demand, penalty and reasonable legal expense arising from the Works, including damage to the Building or to any other occupier's property, injury to or death of any person, breach of any statutory requirement relating to the Works, and any claim by a contractor, supplier or workman engaged for the Works. This indemnity does not extend to loss to the extent caused by the Landlord's own act, omission or breach.
7.5 The Landlord and its representatives may enter the Premises during the Fit-Out Period to inspect the Works, on reasonable prior notice except in an emergency. If any part of the Works is being carried out in breach of this Agreement, the Landlord may by written notice require the Tenant to stop that part and to remedy it within a reasonable period stated in the notice. The Landlord shall not stop the Works as a whole where the breach affects only part of them, and shall not exercise this right in respect of a matter that is the subject of a bona fide dispute unless safety requires it.
8. COMPLETION OF THE WORKS
8.1 The Tenant shall notify the Landlord in writing when the Works are complete. Within seven working days of that notice the Parties shall jointly inspect the Premises. The "Fit-Out Completion Date" is the date on which the Landlord confirms completion in writing, or the eighth working day after the Tenant's notice if by then the Landlord has neither confirmed completion nor given the Tenant a written list of defects.
8.2 On completion the Tenant shall give the Landlord: as-built drawings for all services; testing and commissioning certificates for the electrical, fire and HVAC works; copies of all statutory approvals obtained for the Works; warranties for installed equipment; and written confirmation that all debris has been removed and all contractor dues paid.
9. OWNERSHIP OF THE FIT-OUT AND REINSTATEMENT
9.1 __________
9.2 Clause 9.1 applies to every element of the Works except an item specifically dealt with in this Clause 9, and for such an item the specific agreement prevails.
9.3 Any removal and making good required under this Clause 9 shall be carried out by the Tenant at its own cost, in a good and workmanlike manner, causing no damage to the structure or to base-building services, and leaving the Premises clean, safe, and clear of the Tenant's property and of all debris.
9.4 The Tenant's presence at the Premises after the end of the Lease for the purpose of removal and making good is permissive only. It does not create a tenancy, renew the Lease or continue the Tenant's occupation for any other purpose. Any amount the Landlord accepts under this Clause 9 is accepted as compensation for use and occupation and not as rent, and does not amount to assent to the Tenant continuing in possession for the purposes of Section 116 of the Transfer of Property Act, 1882.
9.5 Nothing in this Agreement obliges the Landlord to pay the Tenant for the Works, for any part of them, or for any residual value in them.
10. TAXES
10.1 All amounts payable under this Agreement are exclusive of goods and services tax. Where GST is payable on a supply under this Agreement, the recipient shall pay it in addition against a valid tax invoice containing the particulars required by law, and the supplier shall report the supply correctly and on time so that the recipient can claim any input tax credit to which it is entitled. Where the recipient is liable to pay GST under reverse charge, it shall pay that tax to the Government and not to the supplier, and shall issue a self-invoice under Section 31(3)(f) of the CGST Act, 2017.
10.2 Where the Income-tax Act, 1961 requires tax to be deducted at source from a payment under this Agreement or under the Lease, the payer shall deduct it, deposit it within time, and issue the certificate; a deduction so made and deposited discharges the payment to that extent. The Tenant is responsible for deduction at source on payments it makes to its contractors and suppliers for the Works.
10.3 Each Party bears its own income tax. Municipal property tax on the Premises remains payable as provided in the Lease. Any increase in property tax or other levy arising directly from the Works is payable by the Tenant.
11. RELATIONSHIP WITH THE LEASE
11.1 This Agreement is supplemental to the Lease and shall be read with it. A term defined in the Lease has the same meaning in this Agreement unless defined differently here.
11.2 Except where this Agreement expressly says otherwise, it does not vary the Lease. If there is a conflict between this Agreement and the Lease on the Works, the Fit-Out Period, or what happens to the fit-out at the end of the Lease, this Agreement prevails; on every other matter the Lease prevails.
11.3 This Agreement does not create, transfer or enlarge any interest in the Premises or in the Building, and does not grant the Tenant any right of occupation. The Tenant's right to occupy the Premises arises only under the Lease. This Agreement grants the Tenant and its contractors permission to enter the Premises to carry out the Works, and nothing more.
11.4 A breach of this Agreement by the Tenant is a breach of the Lease and the Landlord may exercise the remedies in the Lease, subject to any notice and cure period the Lease provides. A breach of this Agreement by the Landlord entitles the Tenant to the remedies in the Lease and to the extensions in Clause 3.4.
12. NOTICES
12.1 A notice under this Agreement shall be in writing and delivered by hand against written acknowledgement, by reputed courier, or by registered post with acknowledgement due, to the address of the receiving Party stated in this Agreement.
12.2 A Party that changes its address or email for notices shall notify the other Party in writing, and until it does so a notice to the last notified address is validly given.
13. DISPUTE RESOLUTION AND JURISDICTION
13.1 If a dispute arises out of or in connection with this Agreement, either Party may give the other a written notice of dispute. A senior representative of each Party shall meet within fifteen days of that notice and attempt in good faith to resolve it.
13.2 If the dispute is not resolved within thirty days of the notice of dispute, __________.
13.3 The city referred to in Clause 13.2 is __________, and the courts at __________ have jurisdiction over any matter arising out of this Agreement, including supervisory jurisdiction over any arbitration under it.
13.4 Nothing in this Clause prevents either Party from applying to a competent court for urgent interim relief, including under Section 9 of the Arbitration and Conciliation Act, 1996 where Clause 13.2 provides for arbitration.
13.5 While a dispute is pending the Parties shall continue to perform their obligations. The Tenant shall not stop the Works and the Landlord shall not withdraw or suspend this consent on account of the dispute, except where safety or a statutory direction requires it.
14. GENERAL
14.1 Force majeure. Neither Party is liable for delay caused by an event beyond its reasonable control, including flood, earthquake, fire, epidemic, riot, war, a government or court order suspending construction activity, and a direction of a pollution control authority restricting construction. The Fit-Out Period and the date in Clause 3.3 are extended by the period the event continues. The affected Party shall notify the other within seven days of becoming aware of the event and shall take reasonable steps to mitigate its effect.
14.2 Confidentiality. Each Party shall keep confidential the commercial terms of this Agreement and the other Party's drawings, designs, specifications and pricing, except where disclosure is required by law or a regulator, or is made to professional advisers, lenders, insurers, auditors or contractors who need it and are bound to keep it confidential.
14.3 Assignment. Neither Party may assign or transfer this Agreement separately from the Lease. It passes with the Lease to a permitted assignee or successor of that Party's interest.
14.4 Entire agreement. This Agreement, together with Schedule A, the Approved Drawings, the Condition Report and the Lease, records the whole agreement between the Parties on the Works, and supersedes all prior correspondence and understandings on them.
14.5 Amendment and waiver. An amendment to this Agreement must be in writing and signed by both Parties. A Party's failure or delay in enforcing a term is not a waiver of it.
14.6 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions continue in full force, and the Parties shall replace the affected provision with a valid one closest to their original intention.
14.7 Counterparts. This Agreement may be executed in two counterparts, each an original and together one agreement, one counterpart being retained by each Party.
14.8 Governing law. This Agreement is governed by the laws of India. It is executed at __________ in __________ and is stamped in accordance with the stamp law in force in __________.
SCHEDULE A
Part 1 — Scope of the Works
__________
Part 2 — Approved Drawings
__________
EXECUTION
The Parties have signed this Agreement on the date stated at the beginning.
For and on behalf of the Landlord, __________
Signature: ______________________________
For and on behalf of the Tenant, __________
Signature: ______________________________
WITNESSES
- Signature: ______________________________
Address: ______________________________
- Signature: ______________________________
Address: ______________________________
Both Parties should initial every page of this Agreement, Schedule A, the Condition Report and every Approved Drawing.