Leasing a property is a common practice in the corporate world, whether for commercial or residential purposes. However, there are two legal documents that play a crucial role in such transactions – lease deed and lease agreement. While both documents serve the same purpose of defining the terms and conditions of the lease, they have a few differences that are significant from a legal standpoint. In this article, we will explore the key differences between lease deed and lease agreement.
A lease, in simple terms, is a legal document that outlines the terms and conditions of renting a property. A lease deed is a legal document that essentially transfers the ownership of the property from the lessor to the lessee for a specified period. On the other hand, a lease agreement is a legal document that establishes the terms and conditions of the lease but does not transfer the ownership of the property.
A lease deed is a registered legal document that requires stamp duty and registration fees to be paid. The document is signed by both parties and attested by two witnesses. A lease agreement is generally not registered, and stamp duty is not required to be paid. However, it is advisable to get the document notarized to avoid any legal disputes in the future.
A lease deed is valid for a specific period mentioned in the document. It can be renewed based on mutual agreement between both parties. A lease agreement, on the other hand, can be valid for a fixed term or on a month-to-month basis. It can be terminated by either party with sufficient notice.
In case of termination of the lease, the lease deed requires the lessee to vacate the property and hand over the possession to the lessor. It also includes provisions for damages or penalties in case of breach of agreement. A lease agreement usually provides for a notice period, which must be given by either party in case of termination. It may or may not include provisions for damages or penalties, depending on the terms and conditions agreed upon.
In conclusion, a lease deed is a registered legal document that transfers the ownership of the property from the lessor to the lessee for a specified period, whereas a lease agreement is a non-registered legal document that establishes the terms and conditions of the lease but does not transfer the ownership of the property. While both documents are important for a leasing transaction, it is essential to understand the differences between them to avoid any legal disputes in the future.