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A shop or office needs a written rent agreement that covers more than a home lease: the business use allowed, lock-in period, yearly rent increase, fit-out and signage rights, and GST on rent. For an 11-month agreement, stamp duty is a fixed amount in most states (₹1,400 for commercial property in Gujarat), and the same agreement works as address proof for GST registration.
Why a shop / commercial agreement is different from a home agreement?
A residential template leaves out the things that cause most commercial disputes: what business you can run, whether the landlord can increase rent every year, who pays for renovation, and what happens if you leave early. A shop agreement spells these out so both sides know where they stand before money goes into the premises.
What Clauses every shop rent agreement should have?
| Clause | What it settles |
|---|---|
| Permitted use | The business allowed (e.g. retail clothing, clinic, office) — prevents disputes if you change trade |
| Lock-in period | Minimum months neither side can end the agreement |
| Rent escalation | Yearly increase, usually a fixed percentage on renewal |
| Security deposit | Amount, and when and how it’s returned |
| Fit-out and renovation | Who pays, what you can change, and whether you must restore it when you leave |
| Signage and branding | Whether you can put up boards outside the shop |
| Maintenance and common charges | Market or mall maintenance, electricity, water |
| Sub-letting | Whether you can share or sub-let the space |
| GST on rent | Whether rent is quoted inclusive or exclusive of GST |
| Termination and notice | Notice period and what happens to the deposit on early exit |
eDrafter’s Rent Agreement AI drafts these commercial clauses for a shop or office, so you don’t start from a home-rent template.
Stamp duty on a shop rent agreement
Stamp duty is set by each state and must be paid in the state where the shop is located. For an 11-month agreement:
| State / UT | Stamp value (11 months) |
|---|---|
| Gujarat | ₹1,400 (commercial) |
| Haryana | ₹101 |
| Maharashtra | ₹500 + compulsory registration |
| Karnataka | 0.5% of security deposit, max ₹500 |
| Delhi, Uttar Pradesh, Tamil Nadu, Telangana, West Bengal, Rajasthan, Punjab, Madhya Pradesh, Jharkhand, Assam, Andhra Pradesh, Uttarakhand, Chandigarh, J&K and other states eDrafter serves | ₹100 |
(Full list for all 23 states and UTs: stamp paper for rent agreement.)
The stamp paper must name the landlord and tenant correctly and describe the document as a rent or lease agreement. eDrafter’s Rent Agreement AI sets the correct stamp value for your state automatically.
Do you need to register a shop agreement?
- 11 months or less: In most states, registration isn’t compulsory — the agreement needs correct stamp duty and signatures of both parties and two witnesses.
- More than one year: Registration is compulsory in every state under the Registration Act, 1908.
- Maharashtra: Every leave and licence agreement — commercial included — must be registered, even for 11 months.
Long-term commercial leases (3, 5 or 9 years) are common for shops because owners want stability. If you’re signing one, plan for registration at the Sub-Registrar office.
Create shop rent agreement with eDrafter’s Rent Agreement AI
Step 1: Create with AI, upload a draft, or type it
Create with AI by filling in the owner’s name, tenant’s name, shop address, rent, deposit, lock-in and other terms. Already have an agreement? Upload the draft (PDF, Word or a phone photo), or simply type it in.
Step 2: Choose stamp duty, scan and signatures, then pay
Select the stamp duty for your state, choose the scan type you need, and opt for a digital signature if required. Enter the signatories’ details and complete the payment.
Step 3: Approve your draft by email
You receive the draft agreement on your email for approval. Need changes — a different lock-in, a signage clause, an updated rent? Just reply by email; our team makes every change you ask for and sends the revised draft back for your approval.
Step 4: Printed on stamp paper and delivered
Once you approve, the agreement is printed on genuine state e-stamp paper. The final scanned copy is emailed to you, and the hard copy is delivered to your address.
eDrafter has served 1.3M+ customers since 2016, is ISO 27001 and ISO 9001:2015 certified, and supplies e-stamp paper in 23 states and union territories.
What Documents do I need for a Shop Rent Agreement?
- Aadhaar and PAN of landlord and tenant (or the authorised signatory, if the tenant is a company or firm)
- Shop or office address with PIN code
- Ownership proof of the landlord (property tax receipt or electricity bill)
- Rent, deposit, lock-in, escalation and notice details
- Business name and GSTIN (if already registered)
- Two witnesses with ID
Frequently Asked Questions (FAQs)
Is a residential rent agreement format fine for a shop?
It’s better not to use one. A home format usually misses permitted use, lock-in, rent escalation, fit-out and GST clauses — the points most shop disputes are about.
Can a company or partnership firm be the tenant?
Yes. The agreement names the company or firm as tenant and is signed by an authorised signatory, usually backed by a board resolution or partner authorisation.
What is a reasonable lock-in period for a shop?
It depends on the deal, but commercial lock-ins are usually longer than residential ones, especially where the tenant spends on fit-out. Agree it in writing before signing.
Can I use an 11-month shop agreement for GST registration?
Yes, a valid stamped agreement is generally accepted as proof of address, along with a utility bill of the premises.
Who pays stamp duty on a shop agreement?
The law leaves it to the parties. In practice the tenant usually pays.
Can I run a different business later from the same shop?
Only if the permitted-use clause allows it or the landlord agrees in writing. Keep the use clause broad enough for your plans.
Does the landlord charge GST on rent?
If the landlord is GST-registered and the property is commercial, GST is generally added to the rent. Check the agreement says whether rent includes GST.
Disclaimer: eDrafter.in is not a law firm or a chartered accountancy firm. This article is general information, not legal or tax advice. Stamp duty and GST rules change — confirm current rules for your state or consult a professional.
