01. 1. Security Deposits and Rent Escalation Clauses
In New Delhi, the standard security deposit for commercial properties ranges from 3 to 6 months of rent. Rent escalation clauses must be clearly drafted. The market standard is a 15% escalation every 3 years, or an annual escalation of 5% to 7%.
02. 2. Lock-In Periods and Notice Terms
The lock-in period prevents either party from terminating the lease prematurely. For warehouses, this is typically 3 years. The lease must detail the exit penalty and the required notice period (usually 3 to 6 months) for termination after the lock-in expires.
03. 3. CAM, Utilities, and GST Liabilities
Common Area Maintenance (CAM) charges, property taxes, municipal taxes, and commercial electricity bills must be explicitly allocated. Commercial leases are subject to 18% GST, which is usually paid by the tenant over and above the base rent.