Renting out a high-value property, particularly one worth 10 crores or more, brings unique challenges. While a tenant’s financial commitment may seem substantial, it’s only a fraction of the landlord’s investment. In cases where tenants don’t vacate or fail to uphold their responsibilities, the landlord faces much greater risks. Therefore, lease agreements in these situations are often crafted to favor the landlord’s security while still ensuring a fair experience for tenants.

Here are some crucial elements to consider when creating a lease agreement for a high-value property:

• 1. Repair Responsibilities 
  
  It’s important to specify who is responsible for different types of repairs. One common approach is to set a threshold amount for repairs. For example, any repair costing less than a specified amount is covered by the tenant, while larger repairs fall under the landlord’s responsibility. Additionally, in case the landlord fails to address the required repairs, the agreement can outline how the tenant may cover the cost and deduct it from the rent.
  
• 2. Inventory of Fittings and Fixtures 
  
  A detailed inventory of fittings and fixtures at the start of the lease helps avoid disputes when the tenant vacates. This list should be accompanied by photographs and signed by both parties. Normal wear and tear is expected, but it’s essential to distinguish it from significant damage or abnormal wear, which the tenant should be responsible for addressing.
  
• 3. Handling Non-Payment or Overstaying
  
   The lease agreement should clearly outline the consequences if the tenant fails to pay rent or continues occupying the property after the lease expires. To protect the landlord, the lease might stipulate immediate action options, such as a penalty clause for each day the tenant overstays. This ensures that, even in court, the landlord has a solid foundation for a favorable resolution.
  
• 4. Tenant Selection 
  
  Choosing the right tenant is critical and often more important than the rental income. A good tenant will respect the property and the terms of the lease. It’s worth taking the time to vet potential tenants thoroughly, considering their rental history, references, and financial stability to reduce the risk of future issues.
  
• 5. Landlord Access and Tenant Privacy 
  
  Tenants often want freedom from landlord interference, which is fair. However, the landlord has a right to inspect the property periodically. A balanced approach is to set specific terms regarding notice for inspections, ensuring the landlord can verify the property’s condition while respecting the tenant’s privacy.
  
• 6. Distinguishing Normal Wear and Tear 
  
  Agreeing on what constitutes normal wear and tear versus damage is essential. Define this within the lease and discuss examples beforehand, such as minor scuffs or worn carpet being acceptable, while broken fixtures or significant scratches would not be. This clarity can prevent disputes later on.

Leasing a high-value property can be complex, but a well-thought-out lease agreement provides both the landlord and tenant with the structure needed to avoid common pitfalls. As your real estate partner, I’m here to guide you through this process, ensuring your interests are protected while fostering a positive relationship with your tenants. For any questions about leasing luxury properties, feel free to reach out!