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Lease Deed for lease of land for long period.

Format of Lease agreement for lease of land for long period.

Some times the parties enter into lease agreement for long period including for construction of building on land. A perpetual lease is a regular lease except for one aspect - the right of renewal rests with lessee and not with the lessor. Typically the right of renewal rests with the individual who owns the property (lessor). Leaseholders usually must pay ground rent and service charges. Any lease of less than 70 years can start to significantly affect the value of the house when compared to a like property with a longer lease. If you have too short a lease, the property can decline in value even if property prices in your area are generally rising.

Sample Format of Lease Deed for long lease of land is given below.



This Agreement to lease is made at ________________ this _____ day of ______between Mr. ________________ son of ________________ Resident of ________________________________.hereinafter referred to as 'the Lessor' of the One Part


Mr. ________________ Son of ________________ Resident of ________________ hereinafter referred to as the 'Lessee' of the Other Part.

The Lessor is absolutely seized and possessed of or otherwise well and sufficiently entitled to the piece of land situated at________________ and more particularly described in the Schedule hereunder written.

The Lessee has approached the Lessor with a request to grant a long lease of the said land with a view to construct a building or other structure thereon either for letting out the same or any part thereof or for carrying on business therein and which the Lessor has agreed to do on the following terms and conditions agreed to between the parties.

1. The Lessor agrees to demise to the Lessee and the Lessee agrees to take on lease the said piece of land situate at ________________ and more particularly described in the Schedule hereunder written for a period of 99 years commencing from the date of the deed of lease to be executed as hereinafter mentioned at the yearly rent of Rs ________________ to be paid in advance from the commencement of the lease without any deductions.

2. The rent shall be exclusive of the taxes, assessments, dues and duties payable in respect of the said land and the building or buildings to be constructed thereon, to the Government or the Municipal Corporation or any other local authority or public body and which taxes etc. will be payable by the Lessee as and when they become due and payable.

3. The Lessor shall make out a marketable title to the said piece of land free from all encumbrances and claims or reasonable doubts.

4. The Lessor shall produce or cause to be produced to the Lessee or his Advocate all documents of title in his possession or power for investigation of the title to the said land.

5. The Lessee or his Advocate shall send requisitions on title, if any to the Lessor or his Advocate within four weeks from the date of production of the title deeds for inspection as aforesaid failing which the Lessee shall be deemed to have accepted the title of the Lessor.

6. On the Lessor making out a marketable title as aforesaid or the Lessee accepting the title, but not otherwise, the Lessor shall grant a lease of the said piece of land by executing a Deed of lease in duplicate for the said period and at the said rent.

7. The Deed of Lease will contain usual covenants to be given by the Lessee and Lessor and other usual terms and conditions provided that there will be no restriction on the Lessee's right to assign the lease and the Deed of Lease will also contain a condition that on the determination of the Lease by efflux of time or otherwise, the Lessee will surrender the land to the lessor alongwith the building or buildings standing thereon without any compensation. The draft of the Deed of Lease will be prepared by the Lessee's Advocate and approved by the Lessor's advocate.

8. The transaction will be completed within a period of three months from the date hereof.

9. The Lessor shall give complete vacant possession of the land to the Lessee on the date of completion and until then he will not allow anybody to commit encroachment or trespass thereon.

10. All the taxes and other outgoings in respect of the said land upto the date of completion of the lease will be paid by the Lessor.

11. The costs by way of stamp duty and registration charges in respect of the Deed of Lease will be borne and paid by the parties hereto in equal shares. Each party will bear and pay all other costs incurred by him including his Advocate's fees.

12. The Lessor declares that the said land is not subject to any reservation or any intended acquisition or requisition and there are no building restrictions on the land.

13. The Lessee will be at liberty to construct a building or buildings thereon with all requisite and proper sewers, drains and other conveniences and the building or buildings will be constructed as per plans that will be sanctioned by the municipal corporation and/or other local authority or public body as may be required and he will conform to all rules and regulations in that behalf.

14. Nothing in this agreement shall be construed as a present demise of the said land or any part thereof.

15. If any permission or No Objection Certificate is required to be obtained from any authority for granting a lease of the said land as aforesaid the Lessor shall obtain the same at his own costs as a condition precedent to the execution of the Deed of Lease.

16. If the Lessor fails to complete the transaction as, herein provided, the Lessee will have the option either to cancel this agreement by fifteen days' prior notice to the Lessor to that effect or to sue for specific performance and or damages. If the Lessee fails to complete the transaction, on the Lessor making out a marketable title, the Lessor will have the option to cancel this agreement by fifteen days' prior notice to the Lessee to that effect or to sue for specific performance and/or damages.

IN WITNESS WHEREOF the parties have put their respective hands the day and year first hereinabove written.

IN WITNESS WHEREOF the parties have executed this Deed on the day, month and year first as above written.

WITNESSES                                                                                            LESSOR



Relevant Sections of Transfer of Properties Act 1882

Section 107 "Leases how made"

107. A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:

Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.


Section 108 "Rights and liabilities of lessor and lessee"

108. In the absence of a contract or local usage to the contrary, the lessor and the lessee of immovable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following or such of them as are applicable to the property leased :-

A. Rights and liabilities of the Lessor
(a) the lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover;

(b) the lessor is bound, on the lessee's request to put him in possession of the property;

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contract binding on the lessee, he may hold the property during the time limited by the lease without interruption.

The benefit of such contract shall be annexed to and go with the lessee's interest as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

B. Rights and liabilities of the lessee
(d) if during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease;

(e) if by fire, tempest or flood, or violence of any army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void :

Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself to the benefit of this provision;

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and which if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor;

(h) the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased but not afterwards, all things which he has attached to the earth : provided he leaves the property in the state in which he received it ;

(i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them;

(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease;

nothing in this clause shall be deemed to authorize a tenant having an un-transferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee;

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to take, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest;

(l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf;

(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition; and, when such defect has been caused by any act of default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left;

(n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessor's rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor;

(o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the lessor or work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto;

(p) he must not, without the lessor's consent, erect on the property any permanent structure, except for agricultural purposes;

(q) on the determination of the lease, the lessee is bound to put the lessor into possession of the property.

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