Property Law | Lease | Subletting

Deed of Sub-Lease for Subletting Leased Property

Updated sub-lease deed format for a tenant who proposes to grant possession of the whole or part of leased immovable property to a third party, subject to the head lease, applicable property law, registration requirements and State/local tenancy legislation.

Core legal rule: Section 108(j) of the Transfer of Property Act, 1882 provides, in the absence of a contract or local usage to the contrary, that a lessee may transfer the whole or part of the lessee's interest by sub-lease; however, the original lessee does not cease to be subject to the liabilities attached to the head lease merely because of the sub-lease.

When is subletting legally permissible?

Check the head lease firstA contractual prohibition or consent requirement in the original lease can restrict the general right otherwise recognised by Section 108(j).
Check local rent-control lawState or local rent legislation may prohibit or regulate subletting and may create eviction consequences for unauthorised subletting.
Term cannot exceed head leaseA sub-lessor cannot ordinarily grant a greater interest than the one held under the principal lease. The sub-lease should therefore expire no later than the head lease.
Original tenant remains liableSubletting does not, by itself, release the principal tenant from rent, repair, user and other obligations owed to the original landlord.
Landlord consent: it is inaccurate to say that every sub-lease in India is valid merely because the landlord consents. Consent is often essential where the head lease or local tenancy law requires it, but the deed must also comply with the head lease, applicable rent-control/local law, registration law, stamp law and any property-use restrictions.

Registration, stamp duty and execution

Section 107 of the Transfer of Property Act requires a lease of immovable property from year to year, for a term exceeding one year, or reserving yearly rent to be made by a registered instrument. Section 17 of the Registration Act, 1908 similarly requires registration of leases from year to year, for a term exceeding one year, or reserving yearly rent.

Stamp duty and registration charges are State/UT-specific. A sub-lease should therefore be stamped and registered according to the law applicable where the property is situated. The property description should be sufficiently precise to identify the premises, particularly where only part of a larger leased property is being sublet.

Updated deed of sub-lease format

Use the specimen only after checking the original lease, landlord's written consent where required, permitted use, remaining lease term, local rent-control law, stamp duty and registration requirements.

DEED OF SUB-LEASE

This Deed of Sub-Lease is made at ____________ on this ____ day of ____________, 20__.

BETWEEN

Name of Principal Lessee, son/daughter/spouse of ________________, residing/having its office at ____________________________________________, hereinafter called the "Sub-Lessor" (which expression shall, where the context permits, include legal representatives, successors and permitted assigns);

AND

Name of Sub-Lessee, son/daughter/spouse of ________________, residing/having its office at ____________________________________________, hereinafter called the "Sub-Lessee" (which expression shall, where the context permits, include legal representatives, successors and permitted assigns).

Recitals

A. By a Lease Deed dated ____________ executed between Name of Owner/Lessor as lessor and the Sub-Lessor as lessee, the property described in the First Schedule was leased for a term of ____________ commencing on ____________ and ending on ____________.

B. The principal lease is valid and subsisting and the Sub-Lessor represents that there is no existing default or termination notice that would prevent creation of this sub-lease.

C. The principal lease permits subletting / requires prior written consent. The landlord's consent dated ____________ is annexed as Annexure A, where applicable.

D. The Sub-Lessee has requested a sub-lease of the whole / specified portion of the leased premises more particularly described in the Second Schedule and shown in the annexed plan, where applicable.

NOW THIS DEED WITNESSES AS FOLLOWS:

1. Grant of sub-lease. In consideration of the rent and covenants contained in this deed, the Sub-Lessor grants to the Sub-Lessee a sub-lease of the premises described in the Second Schedule ("Sub-Leased Premises"), together with lawful rights of access and use appurtenant to it.

2. Term. The sub-lease shall commence on ____________ and expire on ____________, unless earlier determined in accordance with this deed or the principal lease. In no event shall this sub-lease continue beyond the lawful subsistence of the principal lease.

3. Rent. The Sub-Lessee shall pay monthly rent of Rs. ____________, payable in advance on or before the ____ day of each month by bank transfer/other lawful mode.

4. Security deposit. The Sub-Lessee shall deposit Rs. ____________ as an interest-free refundable security deposit, subject to adjustment only for lawful unpaid dues, damage beyond reasonable wear and tear or other agreed deductions.

5. Compliance with principal lease. The Sub-Lessee shall observe all provisions of the principal lease that are applicable to the Sub-Leased Premises and shall not do anything that would place the Sub-Lessor in breach of the principal lease.

6. Permitted use. The premises shall be used only for residential/commercial/office/other permitted purpose and for no unlawful, hazardous or unauthorised purpose.

7. Taxes, utilities and outgoings. The Sub-Lessee shall pay electricity, water, maintenance, common-area charges, municipal/user charges and other agreed outgoings attributable to its occupation. Liability for property tax, land revenue and other statutory dues shall be allocated as follows: ____________________________________________.

8. Repairs and condition. The Sub-Lessee shall keep the premises in reasonable condition, subject to normal wear and tear, and shall be responsible for damage caused by its acts or omissions, employees, agents, invitees or contractors.

9. Alterations and permanent structures. The Sub-Lessee shall not make structural alterations or erect permanent structures without prior written approval required under the principal lease and applicable law.

10. No further transfer. The Sub-Lessee shall not assign, mortgage, sublet, license, share or otherwise part with possession of the Sub-Leased Premises without prior written consent of the Sub-Lessor and any consent required from the original landlord or under applicable law.

11. Nuisance and legal compliance. The Sub-Lessee shall not cause nuisance or disturbance and shall comply with applicable municipal, fire, building, environmental, zoning, society/association and other legal requirements relevant to its use.

12. Inspection. The Sub-Lessor and, where lawfully entitled, the original landlord may inspect the premises on reasonable prior notice, except in emergency.

13. Indemnity. The Sub-Lessee shall indemnify the Sub-Lessor against reasonable loss, liability or expense caused by the Sub-Lessee's breach of this deed, unlawful use or breach of applicable terms of the principal lease attributable to the Sub-Lessee.

14. Quiet enjoyment. Subject to payment of rent and performance of this deed, the Sub-Lessee may peacefully use and occupy the Sub-Leased Premises during the subsisting term without unlawful interference by the Sub-Lessor or persons claiming through the Sub-Lessor.

15. Default. A material default includes non-payment of rent beyond ____ days after due date, material breach of this deed, unlawful use, unauthorised transfer or conduct that causes or materially risks termination of the principal lease.

16. Notice and cure. Except where immediate action is legally justified, the party alleging remediable default shall give written notice allowing ____ days to cure the breach.

17. Termination. The sub-lease may determine by expiry, lawful notice, surrender, forfeiture or any other mode recognised by the principal lease and applicable law. Where forfeiture is relied upon, the requirements of Section 111 of the Transfer of Property Act and other applicable law shall be complied with.

18. Effect of termination of principal lease. If the principal lease lawfully terminates, this sub-lease shall ordinarily terminate to the extent the Sub-Lessor's interest has ended, subject to any independent statutory right, direct arrangement with the landlord or binding court order.

19. Handover. On expiry or lawful termination, the Sub-Lessee shall vacate and hand over possession in the condition required by this deed, remove permitted fixtures where legally entitled, clear agreed dues and return keys/access devices.

20. Registration and stamp duty. The parties shall cause this deed to be appropriately stamped and registered where registration is compulsory under Section 107 of the Transfer of Property Act, Section 17 of the Registration Act, applicable State amendments or other law. Costs shall be borne by ________________.

21. Notices. Notices under this deed shall be sent to the addresses stated above or to any later notified address by registered post/courier/email/other agreed mode, subject to applicable legal requirements.

22. Governing law and jurisdiction. This deed shall be governed by Indian law and applicable State/local tenancy law. Courts/tribunals having jurisdiction over the property and dispute shall have jurisdiction as provided by law.

23. Principal lease prevails. Nothing in this deed shall enlarge the Sub-Lessor's rights beyond the principal lease. In case of conflict, a mandatory provision of law and valid restriction in the principal lease shall prevail over this deed to the extent applicable.

FIRST SCHEDULE - PRINCIPAL LEASED PROPERTY

Full description: ____________________________________________________________
Survey/Plot/Municipal No.: ________________
Area: ________________
Boundaries: ____________________________________________________________

SECOND SCHEDULE - SUB-LEASED PREMISES

Specific portion sublet: ____________________________________________________________
Floor/unit/area: ________________
Access/common areas: ________________
Boundaries/plan reference: ____________________________________________________________

IN WITNESS WHEREOF, the parties have executed this deed on the date first above written.

SUB-LESSOR
Signature: ________________

SUB-LESSEE
Signature: ________________

Witnesses

1. Name: ________________ Address: ________________________ Signature: ________

2. Name: ________________ Address: ________________________ Signature: ________

Before signing a sub-lease

  1. Read the head lease and confirm whether subletting is permitted, prohibited or subject to prior consent.
  2. Obtain written landlord consent where the head lease or applicable tenancy law requires it.
  3. Ensure the sub-lease term does not exceed the remaining principal lease term.
  4. Check State/UT rent-control legislation and local tenancy restrictions.
  5. Identify the exact sublet area by plan, floor, unit, measurements and boundaries.
  6. Specify rent, deposit, utilities, maintenance, taxes, fit-outs and restoration obligations.
  7. Check stamp duty and registration requirements applicable in the State/UT.
  8. Attach the principal lease, landlord consent and plan where useful or required.

Official legal resources

A sub-lease is highly dependent on the original lease and State/local tenancy law. Where the property is subject to rent-control legislation, industrial-development authority conditions, housing-society rules, a mortgage, government grant or special land-use restrictions, additional consent or prohibition may apply.