What is a fixed-term lease?

A fixed-term lease is a rental agreement where both the landlord and tenant commit to a specific duration typically 11 months, 1 year, 2 years, or longer. The rent, terms, and conditions remain locked in for the agreed period, and neither party can unilaterally exit without consequences.

Common Features

• Agreed tenure clearly stated (e.g., 11 months, 1 year, 3 years).
• Rent is fixed for the duration, with a pre-agreed escalation clause (typically 5–10% annually).
• Early exit by tenant usually involves forfeiture of security deposit or a break clause.
• 11-month agreements are most common in India to avoid mandatory registration obligations in many states.

Why 11 Months is Standard in India

• Agreements exceeding 11 months must be compulsorily registered under the Registration Act, 1908 in most Indian states. To avoid the cost and paperwork of registration, most landlords and tenants opt for 11-month renewable agreements.

Fixed-term leases provide stability and predictability for both landlords and tenants. For landlords, they guarantee occupancy and rental income; for tenants, they provide security of tenure. Always include an escalation clause, lock-in period terms, and early exit conditions explicitly in the agreement.