Leasing a commercial building on Vaishali Marg, Jaipur: rent, lock-in and what to check

What does a commercial lease cover?

The rent is the headline, but the other clauses decide whether the building works for your business. A good lease says all of these in writing:

• Rent. The monthly amount and the day it is due. Say whether it is for the whole building or per floor.
• Security deposit. Money held by the owner and returned at the end, subject to the terms of the lease.
• Lock-in period. The time during which neither side can end the lease without the penalty set in the agreement.
• Escalation. The agreed increase in rent at set intervals.
• Fit-out period. Time to build your interiors before rent starts, if the owner agrees one.
• Maintenance and utilities. Who pays for common areas, power, water and repairs.
• Signage. Where your board can go and how large it can be.
• Permitted use. The business you are allowed to run in the space.
• Exit. The notice period, the condition in which you hand the space back, and what happens to the fit-out.

Does a commercial lease need to be registered?

Yes, if the term is longer than one year. Section 17(1)(d) of the Registration Act, 1908 makes registration compulsory for leases of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent.

Registration means stamp duty and a registration fee. Agree in advance who pays them, and have a lawyer draft or read the lease.

Why look at Vaishali Marg?

Vaishali Nagar is an established retail area in west Jaipur. Along Vaishali Marg you find banks, salons, boutiques and apparel showrooms, which is why showrooms, clinics and branch offices look here.

Whole building or one floor? An example: SKL Tower

SKL Tower (B-111) is a newly built independent building on Vaishali Marg: basement, ground floor, three upper floors and a terrace, with a lift to every level. It can be leased whole or floor by floor, from 1,360 sq. ft. You can read the full details on its listing page.

For the whole building our preference is a long lease of 9 years with a lock-in. Rent, deposit and escalation are shared once we know your floors, your use and your start date. The owner is also open to selling the building, so you can compare both.

Carpet, built-up or super built-up: which area is your rent based on?

The same building has three different areas. For SKL Tower they are:

• Carpet area: 5,766 sq. ft, the floor you can actually use.
• Built-up area: 7,028 sq. ft, which adds the thickness of walls.
• Super built-up area: 7,505 sq. ft, which adds a share of common areas such as stairs and the lift.

Here the carpet area is about 77% of the super built-up area. A rent quoted per sq. ft on the larger area looks cheaper than the same rent quoted on carpet area. Always ask which area the rate is based on, and compare buildings on the same basis.

A tenant’s checklist

1. Ask for the building’s approval papers and its completion certificate.
2. Check the floor plans against the space you see, and confirm the area the rent is based on.
3. Confirm parking, the lift, the power load and the water supply.
4. Agree signage rights in writing.
5. Read the lock-in, escalation and exit clauses with a lawyer.
6. Ask whether GST applies to the rent and who pays the stamp duty and registration.
7. Agree the handover condition and the fit-out period.

Tell us what you need

If you are comparing buildings, tell us your use, the floors you need and your start date. We will share a proposal for SKL Tower, and tell you honestly if another building suits you better.