Guide · Commercial
Commercial lease basics
The headline rent is the number everyone negotiates and rarely the one that decides what you pay. These are the terms that actually move money.
Why this matters
Negotiate the whole package
Landlords defend headline rent because it benchmarks the building. Everything else is softer.
Written by Shivansh Properties, Noida.
Last checked .
When a company takes its first commercial space in Noida, almost all of the negotiating energy goes into the rent per square foot. That is understandable and it is also where the least give usually is, because a landlord who cuts headline rent for you has set a benchmark for every other tenant in the building.
The terms around the rent are where deals are actually won. Below is what to look at, roughly in order of how much money it moves over a typical lease.
This is a plain-language overview rather than legal advice. Have the lease reviewed by a lawyer before signing — the cost of that is trivial next to a five year commitment.
Step by step
The terms that matter
In the order we work through it with clients.
1What the quoted rate excludes
Maintenance or common area charges are frequently quoted separately from rent, and the gap between the number you were told and the amount leaving your account can be substantial.
Ask for the all-in figure per square foot per month, then compare buildings on that. Also ask what maintenance actually covers — air conditioning hours, power backup, security, and what happens outside standard hours.
2Escalation
Commercial leases usually build in a periodic increase. The size and frequency of that increase compounds over the term and can matter more than the starting rate.
Model it out over the full term before agreeing. A slightly higher starting rent with a gentler escalation is often cheaper overall than the reverse.
3Term, lock-in and notice
The term is how long the lease runs. The lock-in is the period during which you cannot walk away without paying anyway. The notice period is how much warning either side must give.
Match the lock-in to your own plans honestly. A lock-in that suits the landlord perfectly is expensive for a company that outgrows the floor in year two.
4Security deposit
Commercial deposits are typically expressed as a number of months' rent and can be significant working capital. Negotiate both the amount and the terms for its return.
Get the return conditions written specifically — what deductions are permitted, and by when it must be repaid after you vacate.
5Fit-out period and rent-free time
You cannot trade while you are building. A rent-free fit-out window is often the most negotiable term in the whole lease, and for a fit-out heavy business like a restaurant it is worth a great deal.
Ask for more than you think you need. Fit-outs overrun.
6The use clause
The lease will specify what the premises may be used for. Make sure it covers what you actually intend to do, including anything you might add later.
This matters enormously for food service, where the permitted use plus the building's own rules determine whether you can operate at all.
7Repairs, alterations and what happens at the end
Establish who is responsible for what during the term, whether you need consent for alterations, and what condition you must return the premises in.
A requirement to strip out your fit-out and reinstate the space at the end is a real cost that people forget to price when they sign.
8Registration
Leases beyond a short duration generally need to be registered, and registration carries stamp duty of its own. Confirm the current requirement and cost for your lease length rather than assuming.
Asked and answered
The two questions behind most calls
Direct answer, then the detail.
What is the most negotiable term in a commercial lease?
Usually the rent-free fit-out period, followed by the deposit and the escalation. Landlords defend headline rent hardest because it sets a benchmark for the rest of the building, so pushing there yields least. Push on the terms around it instead.
For fit-out heavy uses like restaurants and clinics, an extra month of rent-free time can be worth more than a small reduction in the rate.
Does the quoted rent include maintenance?
Often not. Maintenance or common area charges are commonly quoted separately, and they can change the real monthly cost materially. Always ask for the all-in figure per square foot and compare competing buildings on that number rather than the headline rate.
Straight answers
Questions we get asked
If yours is not here, ring us. We would rather answer it than have you guess.
What is a lock-in period?
The period during which you are committed to the lease and cannot exit without paying for the remainder of it. Match it to your own plans — a long lock-in is fine for a settled operation and expensive for a business that might outgrow the space.
How much security deposit is normal for commercial space?
It is usually expressed as a number of months' rent and varies with the building and the size of the space. Both the amount and the return conditions are negotiable, and the return conditions matter as much as the number.
Do commercial leases need to be registered?
Leases beyond a short duration generally do, and registration attracts stamp duty. Confirm the current requirement for your lease length with your lawyer, since the rules and the cost are not something to assume from an older deal.
Can I sublet or assign a commercial lease?
Only if the lease permits it, and most require the landlord's consent. If there is any chance you will want to move on, restructure or bring in a group company, negotiate that flexibility at the start rather than asking for it later.
What should I check about the use clause?
That it covers exactly what you intend to do and anything you might add later. For food service in particular, the permitted use plus the building's own rules decide whether you can operate at all, so confirm before signing anything.
Still stuck?
Ask us instead.
Guides only go so far. If your situation has something odd about it, ring us and describe it — we have probably seen it before.