1.

Lease Deed
Chapter 5 of the Transfer of Property Act, 1882
Define:
● Written legal document/instrument through which a lease agreement is executed.
● Necessary for legal authenticity of a lease between two parties so as to be recognized
in a court of law in case of a dispute.
● Has to be registered under the registration Act, 1908 if the tenure of the lease exceeds
1 year.
● A Lease Deed is a contract between the lessor (owner of the property) and the lessee
(the tenant of the property) for the use of the said property on a lease rental basis.

IMP:
● Therefore, by executing a Lease Deed, what is transferred by the Lessor to the Lessee
is only his right to enjoy the property, subject to the terms agreed upon, and not the
whole or any part of the absolute ownership rights, this type of transfer in
conveyancing parlance is known as a ‘demise’.
● Registration Act, 1908, any property being leased for residential, commercial,
cultivation, hereditary allowances, or fisheries purpose, should be registered within 4
months from the date of their execution, if they are being leased out for more than 11
months. The law is applicable to all states, (except Jammu and Kashmir). A lease
dead that lasts only for 11 months does not require registration. For lease deed
registration, both, the tenant and the landlord, should be present at the sub-registrar’s
office and pay the stamp duty on the instrument.

Details:
1. Name of the parties
2. Lease Deed Period: This is generally a larger time period, usually more than one year.
3. Lease Consideration: This includes the lease amount payable by the lessee to the
lessor at regular intervals (monthly/ quarterly/ bi-annually/ annually) as specified. The
Security Deposit paid to the lessor is also to be mentioned in the deed. This amount
has to be returned by the lessor to the lessee at the end of the lease period.
4. Notice Period and Exit Clause: In case the lessor or the lessee feels the need to
terminate the lease agreement before the lease period mentioned, they can do so by
giving advance notice to the either party. It also has the provision to compensate the
lessor/ lessee for any loss incurred if the deed is terminated before the mentioned
period.
5. Lease Deed Renewal Terms: T&C for renewing the lease of the property after the
mentioned time period. Usually, a renewal fee is charged by the lessor for lease
renewal. While at most times property leases are automatically renewed, it is at the
discretion of the lessee whether to continue with the lease or not.
6. Subletting Clause: Sub-letting gives the right to the lessor to further lease the property
to different parties and collect lease (or rent) from them in exchange. The main lessee
may also make a profit from this sub-letting exercise.
Format:
The Lease Deed format contains the details such as-
● Name of the Lessor
● Name of the Lessee
● Term of Lease
● Norms of Violation
● Terms and Conditions
● Notice Period
● Details of the Property
● Market Value of the Property
● Lease Terms

Difference between lease deed and lease agreement

An agreement to lease generally covers the broad aspects of the lease, such as the duration,
the rent payable, the rights of renewal of the lease, etc., while a lease deed also includes detail
about the day-to-day operations of the lease.

Lease deed Licence

The Lessee gets a right to possession and The Licensee gets a right use the property
enjoyment of the property but not for a fixed time and for a predetermined
ownership rights consideration

The actual possession is transferred to the The actual possession remains with the
lessee. licensor, the licensee getting only the right
to use the property.

transferable and heritable right. Death of neither transferable nor heritable. A license
either party does not affect a lease as it is a is terminated by death of either party.
heritable right.

The consideration can either be in the form The consideration is usually in the form of a
of a one-time premium or as rent at periodic monthly license fee
intervals

Governed by Rent Control Act. Governed by Indian Control Act.

Lease creates interest on the leased property In license no such interest is created in the
in favor of the lessee. favor of the licensee.

Lease agreement gives the power to alter or License agreement does not give the power
construct. to alter or construct unless specified.
Not revocable by the landlord. Revocable by the landlord.
 2. Simple mortgage
Define:
Where, without delivering possession of the mortgaged property, the mortgagor binds himself
personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event
of his failure to pay according to his contract, the mortgagee shall have a right to cause the
mortgaged property to be sold and the proceeds of sale to be applied, in payment of the
mortgage money.
Simple mortgage is executed where without any property being delivered to the mortgagee;
the mortgagor makes himself liable to repay the debt. It is implied by him in an express or
implied manner that in the event of non-repayment of loan, the mortgaged property can be
used to make good of the loan by the mortgagee

The fundamental characteristic of a simple mortgage is that the mortgagee has no right to
liquidate the property without the permission of the court. The mortgagee can:
1. Apply to the court for consent to offer the sold property, or
2. File a suit for recuperation of the entire sum without offering the property.

Hence the following 3 conditions are necessary for single mortgage:

1. The mortgagor retains the possession of mortgaged property;
2. The mortgagor must personally undertake to pay the mortgage money
3. The parties must expressly or impliedly agree that in the event of the mortgagor
failing to pay according to his contract, the mortgagee shall have a right to cause the
mortgage property to be sold.

Personal Liability:
A simple mortgage entails two types of liabilities, personal liability and the mortgaged
property. There is a personal liability on part of the mortgagor to repay the loan along with
the mortgaged property, hence the mortgagee has to option to move against either the
mortgagor personally thus obtaining a decree against him or he can move against the
mortgaged property to liquidate it for the payment of loan. The presence of a personal
covenant is very important in a simple mortgage and that is what distinguishes it from other
forms of mortgage.

No Delivery of Possession:
There is no delivery of mortgaged property in simple mortgage. The money can be recovered
by a money decree. A clause to transfer the complete interest of a mortgaged property to the
mortgagee on non-payment of loans changes the simple mortgage into mortgage with
possession.

Adverse Possession
A trespasser who removes the mortgagor and takes possession of the land can still be legally
mortgaged. The trespasser can become the owner of the limited right the mortgagor has over
the land mortgaged by him but it does not in any way take away the legal rights of the
mortgagee over the mortgaged land in a simple mortgage.
 3. English Mortgage
Section 58(e) of the Transfer of Property Act, 1882.
Define:
An English mortgage transaction is a proper sale, where the mortgagor transfers the property
to the lender under a binding commitment that upon repayment of the money to the lender on
a fixed date, the lender will re-transfer the property to the mortgagor.

IMP:
● The sale transaction is absolute from the beginning
● Subject to stamp duty and registration
● The mortgagor transfers the property absolutely to the mortgagee. I.e. absolute
transfer of property
● Such transfer is subject to the condition that the mortgagee will retransfer the property
on repayment before the agreed date.
● The mortgagor binds himself to repay the borrowed money before a certain date.
● The mortgagee can sell the property only when the mortgagor has failed to repay the
loan. The permission of the Court is necessary, except in the following cases: a.
English mortgage; b. Where the power of sale has already been conferred by deed to
the mortgagee; c. Where the power of sale has already been conferred by deed and the
mortgaged property is situated within Chennai, Kolkata, Mumbai or any other notified
town or area.
● There is a personal liability of the mortgagor to repay the amount of mortgage debt on
a certain date as agreed. In case of default by the mortgagor, the remedy available
with the mortgagee is to sell off the mortgaged property and recover himself.

4. Exchange Deed
Define:
A deed of exchange is created by the owners of properties, when they decide to transfer their
right in the property to another, in order to acquire ownership of his property. Such a transfer
will be carried out through a deed of exchange. Aside from immovable property, cash and
other properties can also be exchanged between individuals by way of executing a deed of
exchange. If one party is paying money in exchange for a property that is not money, the
transaction will not qualify as an exchange but it will be a sale.

An exchange deed records the following:

1. The date of exchange
2. Names and address of the parties amongst whom the property is exchanged
3. Specifications about the property like its location, area, and others
4. A statement mentioning the property transaction is an exchange
5. Signatures of the parties along with the signatures of the witnesses
6. The stamp duty or the registration fee applicable during the property exchange
 5. Gift Deed
The Transfer of Property Act, 1882
Sec-122 of the Act, “Gift” is the transfer of certain existing moveable or immoveable
property made voluntarily and without consideration, by one person, called the “Donor”, to
another, called the “Donee”, and accepted by or on behalf of the donee.

Define:
A gift of property, involves conferring the ownership of one’s property on to another, through
a gift deed.
An agreement that is used, when a person wishes to gift his property or money to someone
else. A moveable or immovable property can be gifted voluntarily using a gift deed, from the
donor to the donee. A gift deed allows the property owner to gift the property to anyone and
avoids any future dispute arising out of succession or inheritance claims. A registered gift
deed is also evidence in itself and unlike in the case of a will, the transfer of property is
instant and you will not be required to go to the court of law for execution of gift deed and
hence, the deed of gift also saves time.

Draft of a gift deed must include the following details:

● Place and date on which the gift deed is to be executed.
● Relevant information on gift deed regarding the donor and the donee, such as their
names, address, relationship, date of birth and signatures.
● Complete details about the property for which you draft a gift deed.
● Two witnesses to bear testimony of the gift deed and their signatures.

Essentials:
● Transfer at free will
● Gift must be in existence while transferring the same
● Donor is gifting the property out of love towards the Donee and will not take any
monetary consideration in exchange.
● The Gift Deed must mention the property rights of the Donee.
● Acceptance by the Donee
● the property which is to be gifted shall be valued by an approved valuation expert at
the office of Sub-Registrar
● A gift deed should be printed on stamp paper once the amount is paid. Once that is
done, it should be registered at the registrar’s or sub-registrar’s office.
● A gift Deed is valid only if registered.
● Acceptance must be made during the lifetime of the Donor and while he is still
capable of giving.
 6. Partnership Deed
Section 4 of The Partnership Act, 1932
Define: Partnership is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all.
A partnership agreement or deed of partnership is a legal document that is executed by two or more
partners who intend to operate a business for profit. A partnership deed's main function is to clearly
define each partner's responsibilities, ensuring the efficient operation of the partnership company. Any
disagreement or conflict that develops between the partners about the partnership rules is resolved
with the aid of the partnership deed. Registration is required.

Importance:
● It controls and monitors the rights, responsibilities and liabilities of all the partners
● Deeds prevent misunderstandings between partners because they outline all the partnership’s
terms and conditions beforehand.
● Defines a remuneration or salary of the partners and working partners. However, interest is
paid to each partner who has invested capital in the business.
● Partners can consult the partnership agreement in case of a dispute, making a resolution
easier.
● It clears doubts regarding the profit and loss sharing ratio between partners.

Content:
● Purpose of Partnership: The name and address of all the partners and other necessary details
to explain the type of business undertaken by the partners.
● Principal place of business of partnership: The firm will operate from such location(s) as the
Partners determine from time to time.
● Partnership duration: The Deed must mention the firm's establishment date and the deal
period.
● Capital contribution: Contribution of the firm's capital, cash, property, goods, or services in
agreed-upon value (partnership contribution share-wise).
● Capital Withdrawals: Details of the drawing policy permitted to every partner and whether
any interest will be paid to the firm on such drawing.
● Salary & Commission: Details of the ratio or percentage of the partners' salary.
● Profit & loss ratio: Profit/Loss ratio to be accrued to and be borne by the Partners
● Regulation for dissolving partnership: Details of the firm's accounts and how it will be treated
if the firm is dissolved.
● Rules for admission of a new partner: Details regarding the future admission, retirement and
exit of a partner.
● Rules to be followed: Guidelines to be followed if a partner goes bankrupt.
● Account and audit details: Accurate and complete books of account of the firm's transactions
to be available at all reasonable times and open to inspection and examination by any partner.
● Voluntary Withdrawal of a Partner: Rules for voluntary withdrawal to be mentioned in the
Partnership Deed.
● Duties of Partners: It mentions the role and responsibilities of each partner.
● Banking and Partnership Funds: The funds held in the firm's name will be placed in a bank
account designated by the Partners.
● Borrowings: A written consent of all the partners will be required for taking loans from banks,
financial institutions, or any third parties for the firm's financial requirements.
 7. Indemnity Bond
Define:
An indemnity bond is a legal document containing certain contractual obligations. It ensures an
individual will not suffer in the event of any loss or damage caused by another. It assures that specific
conditions between two parties will be met, even if the other party is unable to fulfil them. An
indemnity bond is a legal document that gives you the right to collect compensation from the principal
for a claimed situation. Concerning the agreement, the company is mandated to pay a premium. For
this, the surety company is supposed to pay a premium. The bonded contractor earlier is expected to
settle this premium with the surety company; otherwise, the company can sue the contractor.

The difference between an indemnity and an indemnity bond lies in how they work. Indemnity
ensures compensation for any loss or damage caused by another, including unforeseeable events. On
the other hand, an indemnity bond mentions specific measures describing how compensation will be
provided.

It is needed for the following situations: Borrowing money from banks.; For the release of payment;
In the event of losing a fixed deposit receipt; Transfer property to legal heirs; Property transfer; On the
occasion of death claims; Electricity connection transfer; Government Indemnity schemes

● A principal signing an indemnity agreement states to take full financial responsibility in the
case of bond claims. Therefore, all the charges belong to them rather than the surety.
● Is imposed during an event of an infringement of the terms in the contract. The liability arises
due to a breach, and the party under fault is entitled to bear the expense of compensation to
the other party.
● Can be restructured to cover any expected loss.
● Indemnity bonds are surety bonds. Commerce or transactions do not occur if no mechanism
assures payment. It is a promise by the guarantor to pay the obligation if he fails to fulfil the
contract terms. Guarantee financial reimbursement for any harm caused due to illegal activity.
● An indemnity bond is executed on non-judicial stamp paper of appropriate value.

8. Memorandum of Understanding
Define:
A Memorandum of Understanding usually refers to a preliminary agreement between parties entering
into a contract, before they reach a formal agreement. It is also called a Letter of Intent. Unlike a
formal agreement, which is contracted to create obligations, an MOU is a non-formal agreement. The
only intention is to help the parties reach an understanding, it is legally non-enforceable; it can only
create obligations when a binding understanding is created from the clauses of an MOU. Since MOU
is not a legally binding agreement, care has to be taken that the MOU does not create any legal
obligations on the parties; else it may restrict the parties from negotiating a more complete agreement.

Purpose:
● Helps in setting up an outline and framework for the forthcoming negotiations.
● Helps the parties decide or commit to the project.
● Enforces the need for settling key commercial terms before an actual contract is undertaken.
● Can also help a third party understand the gist or essence of the project.
 ● Processes like merger clearance or FIRB approvals are done after a MOU is entered into.

Content:
● The first clause is to identify the parties entering into the agreement in relation to the project;
● Identify whether the MOU is legally binding or not;
● Stating the conditions to completion and pointing out the key commercial terms;
● Conducting due diligence and related processes;
● Identifying the key deliverables associated with the project;
● Lock-out and exclusivity clause to make the agreement binding or non-binding, as the case
may be;
● Confidentiality clause; according to the terms and conditions of the project;
● Allocating costs related to various projects, when the agreement is binding;
● Lastly, to identify the governing law and jurisdiction with respect to the agreement.

9. Confidentiality Agreement: Indian Contract Act, 1872.

Define: A non-disclosure agreement is a legally enforceable contract that creates a confidential
connection between two parties. The signatory party or the parties to the agreement agree that any
sensitive information they collect will not be shared with anyone else. A confidentiality agreement is
another name for an NDA.

Types of NDA (Non-Disclosure Agreement)

1. Unilateral NDA: When two parties enter into a contract and only one agrees to share
confidential Information and also prevent others from further disclosing that Information to
any other party.
2. Bilateral NDA: Under this type of agreement, both the entering parties agree to disclose
information to each other and prevent each other in further disclosing it to any other party not
involved in the contract by either of the parties.
3. Multilateral NDA: When three or more parties enter into the agreement and only one of them
discloses the confidential information to both of the other parties and expects that the
information is not further disclosed to any other party.

NDAs can be tailored to any extent, however, there are six key aspects that must be included:
1. The names of the contracting parties.
2. A definition of what constitutes confidential information.
3. Any exceptions to the rule of confidentiality.
4. A statement describing how the information to be revealed should be used.
5. The time periods in question.
6. Provisions of a different nature.

● An NDA is usually for a period of one year to ten years, although it might be indefinite
depending on the situation.
● Stamping is a necessary procedural formality without which your document will not be
accepted in Court under normal circumstances.
● A non-disclosure agreement can be registered under the Although registration and
notarization are not legally required, they are always recommended because they make it
easier to substantiate your case.
 10. Registration of Documents
The Registration Act, 1908 deals with the enactments relating to the registration of documents.
Registration is the procedure through which all the documents are recorded by a recognized officer
along with other necessary information to ensure its transparency and authenticity.

Section 17(1) of the Act provides for mandatory registration of certain documents which are as
follows :
a) gift deed of immovable property. b) non-testamentary documents signifying any operation,
declaration, assignment, limitation and extinguishment of any right, title or interest in immovable
property worth rupees one hundred and above. c) non-testamentary instruments granting receipt or
payment of any consideration on account of creation, limitation, assignment, declaration or
termination of such right, title or interest. d) leases of such immovable property for a term exceeding
one year or reservation of yearly rent. e) non-testamentary documents conveying or assigning any
decree or award of the court involving creation, declaration, assignment, limitation or extinguishment
of any right, title or interest in an immovable property worth rupees one hundred and above. f) The
documents of contracts regarding transfer of any immovable property for consideration for the
purpose of section 53 A of The Transfer of Property Act, 1882 that has been executed on or after the
inception of Registration and Other Related Laws Amendment Act, 2001.

Section 18 of this Act lists the following documents that may be optional registered under this Act : a)
Adoption Deed b) Instruments which relate to share in Joint Stock company c) Debenture issued by
Joint Stock Company d) Endorsement upon or Transfer of Debenture, which is issued by Joint Stock
Company. e) Decree or order of the court involving creation, declaration, assignment and
extinguishment of any right, title or interest in an immovable property of value less than one hundred
rupees. f) Document of Past transaction g) Wills h) Grant of immovable property by the Government.
i) Instrument of Collateral Security j) Power of Attorney k) Agreement to Sell l) Agreement of
Mortgage m) Certificate of Sale n) Counterpart of Lease o) Promissory Note p) Leases of immovable
property not exceeding one year and leases excluded under section 17.

● According to section 23 of this Act no documents except will shall be allowed for registration
unless it’s presented within four months from the date of it’s execution. If the document is
executed by several persons at different times, then such document has to be furnished for
registration and re-registration within four months from the date of each execution
● must be presented for registration in Sub registrar’s Office within whose sub-district the
whole or part of the property is situated.
Who can register:
● some person executing or claiming under the same or incase of a copy of a decree or order,
claiming under the decree or order;
● representative of that person;
● representative or assignee of such person who is authorized by power of attorney executed
and authenticated in manner hereinafter mentioned.
Failure to register:
● The failure to register an adoption deed does not confer the right to adopt.
● A document that is obligatory to be registered but is not registered could not establish any
right, duty, or liability over immovable property. That document would effectively get
rendered obsolete.
 ● When a document is not registered, it cannot influence an immovable property that the
document contains. It cannot be accepted as evidence of any type of transaction that affects
such property.

Board resolution and franchise agreements not incl.