Leasing a commercial property is quite different from renting a home or residential property. Everything from the rental agreement and security amount to the tenure and payout frequency will differ. When exploring a commercial property for lease in Mumbai, you must remember that commercial rentals are significantly higher than residential rentals. Furthermore, commercial leases are for a more extended period and can even go up to a period of five years or more as opposed to 11-month residential rental periods.

While in both types of rentals, a property is rented, and monthly rentals are paid out, the terms and conditions differ significantly.

Title ownership authentication

Always ensure that you have comprehensive property ownership details and get access to the title deed to validate the rent. Carry out a thorough investigation to ensure that there is no other ongoing rent or sub-rent associated with the commercial property. Checking this with the landlord is critical before getting into an agreement.

Sanctioned Plans and Power Of Attorney (PoA)

Suppose the commercial property that is meant to be leased is under construction. In that case, it is always prudent to substantiate the commencement certificate and the title deed issued by the relevant authorities. Be sure to check the occupation certificate if you are renting a commercial space in a built-up property. In case of an indirect rent situation, it is imperative to check and confirm if any power of attorney is involved.

Suitable Renting Agreement

Before making any commitment from your end with the owner, ensure that the rental agreement is appropriately based on operations. The rental agreement needs to clearly spell out the nature of the rent, whether it is a co-working office space agreement or a rental lease agreement.

The following basic information must be explicitly stated in a commercial property lease agreement:

Address of the property

Start and conclusion date

The rental amount and annual increment

Complete security deposit details

Payment intervals

Lock-in period and termination details

Rent renewal provision

Names and signatures of all the parties involved

Landlord and tenant details and signatures

Working hours to be mentioned as changing them down the line is a tedious process.

Rental agreement validity

Mortgage and Income Tax Verification

It is always prudent to substantiate the landlord’s income tax background when entering into a commercial agreement to check if there are any criminal proceedings or pending disputes. Doing this will also confirm if the property under consideration is categorized as ‘commercial’ or ‘residential’ per the Income Tax Act of 1961 under the Development Control Regulations. If there is vagueness in the property categorization, a TDS can be levied in the future.

Amenity responsibility

Your business may require amenities such as restrooms, cubicles, a loading dock, improved wiring, specific electric specification or any other alterations. Please make a list of all the requirements and discuss them with the landlord beforehand. Either find a space that is equipped with these amenities or ensure that your lease terms allow you to make amendments and who will be responsible for funding these changes.

Carry out a Background Check of the Property Agent

Don’t go with any random real estate agent, or there are chances of getting duped. You should conduct a background check on the real estate agent before engaging in their services. You can also assess their work through their past rent agreements by word of mouth, so make sure they share details of past clients. If they are reluctant to share past client details, it could be indicative of fraudulent activities. Alternatively, you can check out real-estate buying platforms like Blox.xyz, which are transforming the real estate space through advanced technology and transparency. Their operations and commercial client lists comprising 5-star properties in Mumbai are available for all to see, and when dealing with them, you know they are trustworthy and consumer-centric.

Commercial property leases are more intricate and expensive than residential leases; thus, being thorough and following guidelines are crucial to striking the right deal.