Finding the right property is quite exciting, but applying for a property lease can be pretty intimidating if you are doing it for the first time. Whether a person is looking for space to rent or a company for commercial real estate, this guide breaks down everything you need to know about how to apply for a property lease. Let's dig deeper and see the major steps with understanding documentation and requirements in the rental application process.
Understanding Property Leasing in India
The Indian real estate market, more so the commercial segment, is moving ahead at a very fast pace. Knight Frank reported that commercial real estate increased 35% in 2023 in terms of leasing activities, thereby showing great demand in Gurgaon, Mumbai, and Bengaluru. Be it for offices, shops, or coworking, people are not shy of opting for leasing.
Why Lease and Not Buy?
- Less Upfront Costs: Compared to buying a property, the upfront costs of leasing are lower.
- Flexibility: You can move or expand without being tied down by ownership.
- Tax Benefits: Businesses often qualify for tax deductions on lease payments.
Step 1: Establish Your Leasing Requirements
Before you apply, you will need to determine what you require from a property. To get started, here's a checklist:
- Purpose of the Lease: Residential, commercial, or industrial?
- Location Preference: Locations close to workplaces, schools or business hubs
- Budget: Determination of a budget for rent, including the advance deposits and maintenance cost.
- Size and Amenities: Ensuring that the area meets your functional needs as well as aesthetic requirements
Step 2. Market Research
Start searching for deals by researching properties online. Check out the real estate advisory platforms such as Realsta or consult a local broker. Trends in India highlight high demand for Grade A office spaces in cities like Gurgaon. Therefore, based on this data, one can start looking early in the process.
Step 3: Gather the Relevant Documents
The most crucial step in the process of applying for a rental is collecting all the relevant documents. Proper documentation results in a smooth and smooth application.
For Residential Letting
- Identity Proof: Aadhar Card, Passport, or Driver's License.
- Income Proof: Salary slips, bank statements, or ITR (Income Tax Return).
- Employment Proof: Offer letter or employment certificate.
- References: Contact details of previous landlords, if possible.
For Commercial Letting
- Business Registration Certificate: For business legitimacy proof.
- Financial Records: Tax filings, balance sheets, or bank statements.
- Identity Proof of Business Owners: Aadhar or Passport copies.
- Lease Agreement Documentation: Carefully review the legal terms before proceeding.
Step 4: Tour the Property
Once you’ve shortlisted potential spaces, visit them in person. A physical inspection will help you:
- Verify the property condition.
- Confirm the amenities offered match what’s listed.
- Gauge the neighborhood or surrounding business environment.
Step 5: Understand Lease Terms and Conditions
Lease agreement document is the legal document encompassing all the terms and conditions.
- Lease term: Most standard leases in India last for 11 months so that stamp duty charges do not apply but can be longer for commercial leases.
- Rent: Sure that it is market-driven. For example, premium office space in Gurgaon costs ₹110–₹140 per sq. ft. per month.
- Security Deposit: Usually 2–3 months' worth of rent for an apartment and more for commercial leases.
- Maintenance and Utilities: Identify who will pay for them.
- Renewal Clause: Flexibility in lease renewal term.
Step 6: Apply for Your Rental
Apply to the landlord or real estate advisory service. The application normally contains:
- Your completed application form.
- All supporting documents.
- A token advance (optional).
Tip: Be proactive in communication. Prompt responses to landlord queries can increase your chances of approval.
Step 7: Negotiate the Lease
After acceptance of your application, negotiate lease terms. Pay special attention to the following areas:
- Rent-Free Period: Common in commercial leases, allowing time to set up operations.
- Custom Modifications: For businesses, ensure the lease permits interior changes.
- Early Termination Clause: Provides flexibility if circumstances change.
Step 8: Sign the Lease Agreement
Both the parties will sign the tenancy after the negotiations have been completed. The tenant must ensure that the deed is registered with the office of the local sub-registrar, which includes the following steps
- Payment of Stamp Duty and Registration Fee for the deed.
- Getting signatures on the deed in presence of witnesses.
- Retaining the duplicate copy for reference in the future.
Step 9: Move-In Ready Preparation
Before moving in to the property, do the final property inspection of the utilities such as electricity, water, internet connectivity.
Record the condition of the property so there is no argument when the lease term is about to end.
Indian Commercial Real Estate Trends
Knowledge of trends will help you make smart decisions.
- Tech Sector Growth: Tech firms accounted for 50% of office space leasing in India in 2023.
- Flexible Workspaces: Co-working spaces have witnessed a 20% rise in demand post-pandemic.
- Top Cities: Delhi-NCR, Mumbai, and Bengaluru are the hotspots for commercial leasing.
- Rental Rates: On average, an increase of 10% was seen year-over-year in the prime commercial areas.
Conclusion
Every step from understanding the rental needs of a property to documentation of the lease agreement leads to a hassle-free experience while leasing a residential and/or commercial property.
If you are new to the leasing process, consider using experts such as Realsta to take you through the application of a rental lease. Right strategy will ensure that you get the ideal property as well as realizing your investment value.
So what are you waiting for? Get into leasing today!
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