Agreement of Lease

What the document covers

The Agreement of Lease is a template for recording the letting of property for commercial use. It identifies the lessor as the owner and requires the leased property, called the demised premises, to be described in a property schedule.

The document affects the property owner and the proposed commercial tenant. Important details are left blank and must be completed, including the parties' names and addresses, property location, commencement date, rent, advance, lease duration and notice periods.

Financial and duration terms

The Agreement of Lease provides for the parties to record:

• Monthly rent and the day by which it must be paid.
• An advance payable by the lessee to the lessor.
• Delivery of vacant and peaceful possession to the lessee.
• The number of years for which the lease will continue.
• A possible further lease period by mutual consent.
• A percentage increase in basic rent after a stated number of years, provided there has been no breach of the lease terms.

Any renewal must be completed through the execution and registration of a separate lease deed.

Use and maintenance of the property

The Agreement of Lease limits the premises to commercial purposes and prevents subletting without the lessor's written permission. It also allocates responsibilities between the parties:

• The lessee must keep the premises, fixtures, electrical fittings and water connections in good condition.
• The lessee must pay electricity consumption charges directly to the relevant authority according to meter readings or bills.
• The lessor may inspect the premises at reasonable times and is responsible for whitewashing and substantial repairs.
• The lessee cannot make structural alterations without the lessor's prior written consent.
• The lessee may install air conditioners, electrical appliances and other reasonably required conveniences. These remain the lessee's property and must be removed when the premises are vacated.

Ending the lease

The Agreement of Lease requires the lessee to return peaceful vacant possession when the lease ends. A lessee wishing to leave earlier must give the number of months' notice entered in the deed. If the lessee breaches the terms, including by making structural changes or failing to pay rent, the lessor may revoke the lease after giving the agreed period of written notice.