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The Option To Lease Agreement is a strategic document used in Indian real estate transactions when a potential tenant needs to secure the right to lease a property while maintaining flexibility in the final decision. This document is particularly valuable when a tenant requires time for due diligence, business planning, or securing financing before committing to a full lease agreement. The agreement typically includes specific details about the property, option period duration, option fee, conditions for exercise, and key terms of the proposed lease. Under Indian law, this agreement must comply with the Indian Contract Act, 1872, and consider relevant state-specific property laws. It serves as a crucial intermediate step between initial property interest and final lease execution, protecting both parties' interests during the negotiation and decision-making phase.

1. Parties: Identification of the option grantor (property owner) and option holder (potential lessee), including their full legal names, addresses, and any registration details for companies

2. Background: Context of the agreement, including brief description of the property and the parties' intention to enter into an option arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Option Period', 'Option Fee', 'Lease Terms', 'Property', etc.

4. Grant of Option: Core provision granting the option rights, including exclusivity if applicable

5. Option Period: Duration for which the option is valid and any extension mechanisms

6. Option Fee: Amount payable for the option, payment terms, and whether it's adjustable against future rent

7. Exercise of Option: Procedure for exercising the option, including notice requirements and formalities

8. Proposed Lease Terms: Key terms of the lease that will be entered into if the option is exercised, including rent, duration, and key obligations

9. Property Access: Rights of the option holder to access and inspect the property during the option period

10. Representations and Warranties: Standard representations about property ownership, authority to contract, and property condition

11. Conditions Precedent: Any conditions that must be satisfied before the option can be exercised

12. Termination: Circumstances under which the option agreement can be terminated

13. Governing Law and Jurisdiction: Specification of Indian law as governing law and relevant jurisdiction for disputes

14. Notices: Process and addresses for serving notices under the agreement

15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, severability, etc.