SHOP, SHOWROOM OR BOOTH RENT AGREEMENT
This Agreement is made at __________ on __________.
BETWEEN
__________, __________, with address at __________, PAN __________ (the "Landlord", which expression includes its successors and permitted assigns);
AND
__________, __________, with address at __________, PAN __________ (the "Tenant", which expression includes its successors and permitted assigns).
The Landlord and the Tenant are together the "Parties" and each a "Party".
BACKGROUND
A. The Landlord is the owner of, or is otherwise lawfully entitled to let, the retail premises described in Clause 1 (the "Premises").
B. The Tenant wishes to take the Premises on rent in order to carry on the retail trade described in Clause 3.
C. The Parties have agreed to record the terms of the letting in this Agreement.
IT IS AGREED AS FOLLOWS.
- THE PREMISES
1.1 The Landlord lets to the Tenant, and the Tenant takes on rent, the Premises, being __________ admeasuring __________, situated at __________, in __________.
1.2 The letting includes the shopfront, the shutter, the sanitary and electrical installations existing in the Premises on the date of handover, and the right for the Tenant, its staff, its customers and its suppliers to reach the Premises through the common entrances, corridors and passages of the building during the trading hours stated in Clause 7. The Tenant, its staff and its contractors may also reach the Premises through those common entrances and passages at reasonable hours outside trading hours for deliveries, stock movement, fit-out, refurbishment, stock-taking, repairs and security, subject to the building's security arrangements.
1.3 On handover the Parties shall sign a joint inventory recording the condition of the Premises, the meter readings, the sanctioned electrical load and the fittings handed over (the "Handover Inventory"), in the form of Annexure A. That inventory is the reference point for the condition in which the Premises must be returned.
1.4 This Agreement creates a lease of the Premises within the meaning of section 105 of the Transfer of Property Act, 1882. The Tenant is entitled to exclusive possession of the Premises for the Term, subject to the Landlord's rights of entry under Clause 12.
1.5 The Landlord shall give the Tenant vacant possession of the Premises and sign the Handover Inventory on the Commencement Date, and the date on which vacant possession of the Premises is actually given to the Tenant is the "Handover Date". If the Handover Date is later than the Commencement Date for any reason not attributable to the Tenant, then (a) no Rent, common area maintenance charge, utility charge or other outgoing under this Agreement shall accrue before the Handover Date; (b) any rent-free period under Clause 5 shall run from the Handover Date; (c) the Term, and every anniversary date under this Agreement including each anniversary of the Commencement Date referred to in Clause 5.3, shall be computed from the Handover Date; and (d) if the Handover Date has not occurred within sixty (60) days after the Commencement Date, the Tenant may end this Agreement by written notice, whereupon the Landlord shall refund the security deposit in full within fifteen (15) days of that notice, with interest at twelve per cent (12%) per annum on any amount not refunded within those fifteen days from their expiry until payment, and neither Party shall have any further claim against the other.
- THE RENT LAW GOVERNING THIS LETTING
2.1 __________
2.2 Where the rent law recited in Clause 2.1 confers on a Rent Controller, a Rent Authority or another authority exclusive jurisdiction over the recovery of possession of the Premises, nothing in this Agreement displaces or ousts that jurisdiction, and Clauses 17.2 to 17.4 take effect subject to Clause 17.5. Where Clause 2.1 records instead that no rent statute applies to the Premises, there is no Rent Controller and no Rent Authority having jurisdiction over the Premises, nothing in this Agreement is to be read as submitting any matter to either, and possession, mesne profits and arrears are recovered by suit before the civil court at __________ in accordance with Clauses 17.2 to 17.4.
- PERMITTED USE, TRADE AND LICENCES
3.1 The Tenant shall use the Premises only for __________, and for no other purpose. The Tenant shall not use the Premises for residence, for the storage or sale of hazardous, prohibited or contraband goods, or for any unlawful or immoral purpose. Where the Premises form part of a Shop-cum-Flat, this Agreement lets the shop portion only, and the residential portion of that building forms no part of the Premises and is not let by this Agreement.
3.2 __________
3.3 The Tenant shall obtain and keep in force at its own cost, in its own name, the registration of the establishment under the Punjab Shops and Commercial Establishments Act, 1958 as in force in __________, the trade or health licence of the municipal body having jurisdiction, its registration under the goods and services tax law where that law requires one, any signage or hoarding licence, any food business licence needed for its trade, the registration of its weighing and measuring instruments where its trade uses them, and every other registration or licence required to trade lawfully from the Premises. The Landlord shall sign the no-objection letters in the form the licensing authority prescribes and give the Tenant copies of the ownership, allotment, tax and building documents the Tenant reasonably needs for those applications, within seven (7) days of being asked.
3.4 The Landlord is responsible for the lawful approval of the building for commercial use, for its occupancy or completion certificate and for the fire safety clearance of the building itself. The Tenant is responsible for the fire safety of its own fit-out, its stock and the way it uses the Premises, shall install and maintain the fire-fighting equipment the law requires inside the Premises, and shall keep the fire exits, common passages and the shopfront clear.
3.5 Where an order in force under section 163 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in the district in which the Premises are situated requires the particulars of a tenant or occupier of premises to be reported to the police, the Tenant shall give the Landlord the identification and business particulars needed for that report within seven (7) days of the Handover Date, and shall inform the Landlord in writing of any change in those particulars within seven (7) days of the change; the Landlord shall make the report to the police station in whose area the Premises fall. Failure to comply with such an order is punishable under section 223 of the Bharatiya Nyaya Sanhita, 2023.
3.6 Neither Party shall do anything at the Premises that puts the other Party in breach of any licence, or that renders any insurance on the building void or voidable.
- TERM
4.1 This Agreement is for a term beginning on __________ (the "Commencement Date") and expiring on __________, both dates inclusive, subject to Clause 1.5 and unless ended earlier under Clause 13 (the "Term"). The length of the Term is the interval between those two dates, and no other statement of length made anywhere qualifies them.
4.2 The Term ends on expiry of that period without the need for any notice, and the Tenant shall hand back the Premises in accordance with Clause 14.
4.3 __________
- RENT
5.1 The Tenant shall pay the Landlord rent of __________ per month (the "Rent"), subject to Clause 1.5, to any rent-free period and to the escalation stated in this Clause.
5.2 The Rent for each month is payable in advance, on or before day __________ of that month, by electronic bank transfer to the account the Landlord notifies in writing, or by cheque. Rent for a part month is payable pro rata. The Landlord shall give the Tenant a signed receipt for every payment of Rent and of every other sum received under this Agreement.
5.3 __________
5.4 The Tenant shall pay interest at eighteen per cent (18%) per annum on any Rent that remains unpaid for more than seven (7) days after its due date, calculated from the due date until payment.
- GOODS AND SERVICES TAX, TAX DEDUCTED AT SOURCE, UTILITIES AND OUTGOINGS
6.1 __________
6.2 Each Party shall issue the invoices and tax documents, and file the returns, that the other Party needs in order to claim input tax credit to which it is entitled. The refundable security deposit is not consideration for the letting and no goods and services tax is chargeable on it unless and until it is adjusted against Rent.
6.3 Where the law requires deduction of tax at source on the Rent under section 194-I of the Income-tax Act, 1961, the Tenant shall deduct tax at the rate then in force, deposit it within the time allowed, file the return and give the Landlord the certificate of deduction. Tax is deducted on the Rent excluding the goods and services tax component where that tax is shown separately on the invoice, and any maintenance or common area maintenance charge paid to the Landlord as part of the letting forms part of the amount on which tax is deducted. Rent paid net of tax so deducted and deposited is a good discharge of the Tenant's obligation to pay that Rent.
6.4 __________
6.5 __________
6.6 Municipal property tax on the Premises, and any annual ground rent payable to the lessor of the site on which the building stands, are payable by the Landlord. Any tax, cess, levy or licence fee imposed on the occupier of the Premises or on the business carried on there is payable by the Tenant. This allocation is contractual, and Clause 18.4 says what happens to it if the letting has to be presented in the Form specified in Schedule I to the Punjab Rent Act, 1995, which allocates property tax differently.
- TRADING, SHOPFRONT AND SIGNAGE
7.1 The Tenant shall keep the Premises open for trade during __________, except when closed for fit-out, stock-taking, refurbishment, repairs, a statutory holiday, a closing day observed by the market or the building, or an event beyond the Tenant's reasonable control.
7.2 __________
7.3 The Tenant shall keep the shopfront, shutter, glazing, display windows and signage clean, lit and in good order, and shall not obstruct the common areas, corridors, verandah, parking or frontage of the building with stock, displays, packaging or waste.
7.4 The Tenant shall not use loudspeakers or amplified sound audible outside the Premises except as permitted by law and by the rules of the building, shall remove its trade waste at its own cost, and shall comply with the reasonable written rules of the building's management, market association or society that are notified to it.
- FIT-OUT, ALTERATIONS AND REPAIRS
8.1 The Tenant may carry out non-structural fit-out inside the Premises. The Tenant shall not make any structural alteration, cut or load any structural member, change the shopfront line or the external elevation, or interfere with the building's common services, without the Landlord's prior written consent, which shall not be unreasonably withheld or delayed. No alteration shall be made that departs from the sanctioned building plan, or that requires the sanction of the competent authority, unless that sanction is first obtained.
8.2 The Tenant shall keep the interior of the Premises, its own fit-out and the installations serving only the Premises in good repair and condition, fair wear and tear excepted.
8.3 The Landlord shall keep the structure, roof, external walls, common services, drainage and common areas of the building in good repair, and shall attend to any structural defect, water leakage, seepage or drainage failure affecting the Premises within a reasonable time of written notice. If the Landlord fails to do so within thirty (30) days of written notice, and the disrepair materially affects the Tenant's ability to trade, the Tenant may carry out the repair after giving the Landlord a written estimate, and may deduct the reasonable cost actually incurred from the next instalments of Rent. This self-help right is contractual, and Clause 18.4 says what happens to it if the letting has to be presented in the Form specified in Schedule I to the Punjab Rent Act, 1995, which splits repairs between Part A and Part B of Schedule II to that Act and permits no unilateral deduction.
- SECURITY DEPOSIT
9.1 The Tenant shall pay the Landlord an interest-free refundable security deposit of __________ on or before the Commencement Date.
9.2 The deposit secures the performance of the Tenant's obligations. The Landlord may deduct from it only unpaid Rent, unpaid charges the Tenant owes under this Agreement, and the reasonable cost of making good damage beyond fair wear and tear, in each case after giving the Tenant written particulars of the deduction.
9.3 The Landlord shall refund the balance of the deposit within __________ days after the Tenant hands back vacant possession of the Premises. On any amount not refunded within that period the Landlord shall pay interest at twelve per cent (12%) per annum from the date the refund fell due until payment.
9.4 The deposit is not rent paid in advance. Neither Party may require it to be adjusted against Rent except by written agreement and except as expressly provided elsewhere in this Agreement.
- SUBLETTING, ASSIGNMENT AND EXCLUSIVITY
10.1 __________
10.2 The Landlord may sell or transfer the Premises, but shall procure from the transferee a written acknowledgement, given to the Tenant, that the transferee is bound by this Agreement and holds the security deposit.
- INSURANCE, INDEMNITY AND LIABILITY
11.1 The Tenant shall insure, at its own cost and for the whole of the Term, its stock, fit-out, plate glass and equipment at the Premises, and shall maintain public liability insurance covering injury to persons and damage to property at the Premises.
11.2 The Landlord shall insure the structure of the building against fire and the usual perils.
11.3 The Tenant shall indemnify the Landlord against claims, penalties and losses arising from the Tenant's trade at the Premises, from the acts of its staff, contractors or customers, or from the Tenant's breach of this Agreement or of any law or licence applicable to its business.
11.4 The Landlord shall indemnify the Tenant against claims and losses arising from a defect in the Landlord's title or authority to let, from the condition or failure of the structure or common services, or from the Landlord's breach of this Agreement.
11.5 Neither Party is liable to the other for indirect or consequential loss. This does not limit a claim for Rent or other money due, a claim under Clauses 11.3 or 11.4, or a claim arising from fraud.
- LANDLORD'S COVENANTS
12.1 The Landlord confirms that it is entitled to let the Premises; that there is no order, encumbrance, lender's condition, allotment condition, society rule or association rule preventing this letting or the trade stated in Clause 3.1; that all sums due to the authority that allotted or leased the site, including any annual ground rent, are paid up to date; and that the Tenant paying the Rent and observing this Agreement may hold and enjoy the Premises without interruption by the Landlord or anyone claiming through the Landlord.
12.2 The Landlord and its authorised representatives may enter the Premises to inspect them or to carry out repairs, on at least twenty-four (24) hours' written notice and, so far as practicable, outside trading hours, and shall cause as little disturbance to the Tenant's trade as possible. In an emergency, and on a demand for inspection by the Estate Officer or other competent authority, the Landlord may enter without notice.
- TERMINATION, NOTICE AND LOCK-IN
13.1 Ending this Agreement before the Term expires is governed by this Clause and is subject to any lock-in period stated in it. __________ Where, and only where, the preceding sentence permits a Party to end this Agreement before the Term expires, that Party shall give the other __________ months' written notice, or may instead pay the other __________ months' Rent in lieu of the unexpired part of that notice. The statement of a notice period in this Clause confers no right of termination on either Party: where the preceding sentence permits no early termination, the period stated is of no effect, and neither Party may end this Agreement before the Term expires except under Clause 13.2 or Clause 13.3.
13.2 The Landlord may end this Agreement immediately by written notice if the Rent or other money due remains unpaid for sixty (60) days after written demand; if the Tenant uses the Premises for a purpose Clause 3 does not permit and does not stop within thirty (30) days of written notice; if the Tenant sublets or parts with possession in breach of Clause 10; if the Tenant is wound up, is adjudicated insolvent or has a resolution professional appointed over it; or if the Tenant abandons the Premises for sixty (60) consecutive days without notice.
13.3 The Tenant may end this Agreement immediately by written notice if the Premises become unfit for trade and are not made fit within sixty (60) days of written notice; if the Tenant is prevented from trading for more than ninety (90) consecutive days for a reason attributable to the Landlord or to the building; or if the Landlord breaches Clause 12.1.
13.4 Termination does not affect any right or liability that has already accrued. Where the rent law recited in Clause 2.1 requires an order of a Rent Controller or a Rent Authority before the Tenant can be made to give up possession, a notice under this Clause 13 ends the contractual tenancy only, and possession shall be recovered by application to that authority.
13.5 So that neither Party goes looking for the wrong counter, the Parties record where such an application lies. For Premises in the Union Territory of Chandigarh, it lies to the Rent Controller having jurisdiction over the Premises under the East Punjab Urban Rent Restriction Act, 1949, on a ground available under section 13 of that Act, with appeal to the Appellate Authority within fifteen days under section 15(1)(b) and revision to the High Court under section 15(5). For Premises to which the Punjab Rent Act, 1995 applies, it lies to the Rent Authority appointed by the State Government by notification under sub-section (1) of section 36 of that Act; the Parties record that no such notification has been traced, that in practice applications of this kind are filed before the officer of the district exercising those powers — described in the reported orders as the Rent Controller-cum-Civil Judge (Junior Division), sub-section (1) of section 36 having since the Punjab Rent (Amendment) Act, 2014 notified on 29 August 2014 pointed to the Subordinate Judge 1st Class — and that the Party filing shall file before the officer exercising that jurisdiction on the date of filing; with appeal to the Appellate Authority on whom the State Government has conferred those powers under section 50 of that Act, save that by clause (b) of sub-section (1) of that section no appeal lies in a matter concerning the registration of agreements under sub-section (2) of section 4. Where Clause 2.1 records that no rent statute applies to the Premises — whether because they lie outside every urban area, or because clause (c) of sub-section (1) of section 3 of the Punjab Rent Act, 1995 excludes them — no application to a Rent Controller or a Rent Authority lies at all, and possession is recovered by suit before the civil court of competent jurisdiction.
- HANDING BACK THE PREMISES
14.1 On expiry or termination the Tenant shall hand back vacant possession of the Premises to the Landlord, with all keys and access cards, and with all its stock removed.
14.2 __________
14.3 The Tenant shall clear all electricity, water, maintenance, licence and tax dues relating to its occupation up to the date of handover and produce the receipts, and shall have the utility accounts transferred out of its name.
14.4 __________
- FORCE MAJEURE AND TRADING RESTRICTIONS
15.1 Neither Party is liable for failure or delay in performing an obligation, other than an obligation to pay money, caused by an event beyond its reasonable control, including fire, flood, earthquake, riot, civil commotion, war and an act or order of a government or local authority. This Clause 15.1 does not affect the Rent or any other sum payable under this Agreement, the abatement of which is dealt with exclusively in Clause 15.2.
15.2 __________
15.3 If an event under Clause 15.1 continues for more than one hundred and eighty (180) consecutive days, either Party may end this Agreement on thirty (30) days' written notice, and no payment shall be due for the unexpired part of any lock-in period.
- NOTICES
16.1 Notices under this Agreement must be in writing and delivered by hand against acknowledgement, by courier, by registered post with acknowledgement due, or by email to an address a Party has notified for that purpose, in each case to the addresses stated at the beginning of this Agreement.
16.2 A Party that changes its address shall notify the other in writing within seven (7) days; until it does, notice to the last notified address is good notice.
- DISPUTE RESOLUTION AND GOVERNING LAW
17.1 Before starting any proceeding, the Parties shall try in good faith to settle the dispute by discussion between their authorised representatives within thirty (30) days of one Party giving the other written notice of the dispute.
17.2 __________
17.3 Where arbitration applies under Clause 17.2, the seat and venue of the arbitration is __________, the language is English, and the award is final and binding on the Parties.
17.4 This Agreement is governed by the laws of India, and subject to Clauses 17.2 and 17.5 the courts at __________ have exclusive jurisdiction.
17.5 Clauses 17.2 to 17.4 do not apply to any proceeding for the recovery of possession of the Premises, or to any other matter, over which the rent law recited in Clause 2.1, or the Capital of Punjab (Development and Regulation) Act, 1952, confers exclusive jurisdiction on a Rent Controller, a Rent Authority, an Estate Officer or another authority. Such a matter shall be taken to that authority as Clause 13.5 describes, and any appeal or revision shall follow the ladder that the governing statute provides; a matter on the Estate Office side is taken to the Estate Officer, Union Territory, Chandigarh and up the appeal ladder of the Capital of Punjab (Development and Regulation) Act, 1952, section 19 of that Act barring the civil court. Where Clause 2.1 records that no rent statute applies to the Premises, no such exclusive jurisdiction exists in respect of the tenancy, this Clause 17.5 sends nothing elsewhere on that account, and Clauses 17.2 to 17.4 govern the recovery of possession as they govern everything else.
- STAMP DUTY AND REGISTRATION
18.1 __________
18.2 The Parties shall present this Agreement for registration before the Sub-Registrar having territorial jurisdiction over the place where the Premises are situated in __________, within four months of the date of execution as required by section 23 of the Registration Act, 1908, and each Party shall attend in person or by a duly authorised representative, produce identification and do everything else needed to complete registration. A delay beyond four months may be condoned under section 25 of that Act only on a penalty of up to ten times the registration fee.
18.3 This Agreement is executed in one original. That original bears the full stamp duty, is the instrument presented for registration, and shall be retained by the Tenant; the Landlord shall obtain a certified copy of the registered original from the Sub-Registrar under section 57 of the Registration Act, 1908. If the Parties instead choose to execute a counterpart for the Landlord, they shall first have the duty on that counterpart assessed at the office of the Sub-Registrar under the Counterpart or Duplicate article of the stamp schedule in force in __________, and shall stamp it before it is signed.
18.4 If the Sub-Registrar declines to register this Agreement on the ground that a tenancy of the Premises must be presented in the Form specified in Schedule I to the Punjab Rent Act, 1995, as sub-section (2) of section 4 of that Act requires for premises to which that Act applies, the Parties shall not leave the letting unregistered. They shall instead, within fifteen (15) days, execute that Form and present it for registration on the registration fee of one thousand rupees which that sub-section prescribes, and shall on the same day execute this Agreement as an agreement supplemental to that Form, recording the further terms of the letting. The two instruments shall then be read together as one bargain; this Agreement shall be subject to that Form and to that Act in so far as they are inconsistent with it, and to that extent only the Form shall prevail. Before presentation the Parties shall reconcile in writing the allocations this Agreement makes with those the Schedule I Form makes — in particular property tax, electricity and water charges, which that Form places on the tenant and Clause 6.6 of this Agreement does not, and the division of repairs between Part 'A' and Part 'B' of Schedule II to that Act, which does not permit the unilateral deduction Clause 8.3 of this Agreement allows — and shall record the reconciled position in the supplemental agreement. The Party who bears the cost under Clause 18.1 shall bear the stamp duty, registration fee and incidental charges on both instruments. This Clause has no application to Premises in the Union Territory of Chandigarh, where the Punjab Rent Act, 1995 does not extend, or to Premises which that Act does not reach.
- GENERAL
19.1 This Agreement, with the Handover Inventory in Annexure A, is the entire agreement between the Parties about the Premises and replaces all earlier discussions, term sheets, offer letters and understandings.
19.2 Any amendment must be in writing and signed by both Parties, and must be stamped and registered where the law requires.
19.3 A delay or failure by a Party to enforce a right is not a waiver of that right.
19.4 If any provision of this Agreement is held invalid or unenforceable, the rest of the Agreement continues in force.
19.5 Nothing in this Agreement creates a partnership, joint venture or agency between the Parties.
Signed by the Landlord
__________
Signature: ______________________
Signed by the Tenant
__________
Signature: ______________________
WITNESSES
- __________, of __________
Signature: ______________________
- __________, of __________
Signature: ______________________
Annexure A — Handover Inventory, to be signed by both Parties on the Handover Date, recording the condition of the Premises, the electricity and water meter readings, the sanctioned electrical load, the shutter, shopfront and glazing, the sanitary and electrical fittings, the keys and access cards handed over, and any existing damage.