Commercial vs Residential Agreements

Commercial rent agreements in Pakistan differ significantly from residential ones. They involve higher security deposits, longer notice periods, and business-specific clauses that protect both the property owner and the business tenant.

Key Differences from Residential

  • Higher deposit: 3-6 months vs 1-2 months for residential
  • Longer notice: 60-90 days vs 30 days
  • Goodwill clause: Business goodwill belongs to the tenant
  • License requirements: Tenant must maintain business licenses
  • Insurance: Business insurance often required
  • Operating hours: May be specified in the agreement

Types of Commercial Properties

Shops & Retail Spaces

Suitable for retail businesses, restaurants, and consumer-facing businesses. Key considerations include foot traffic, parking, and signage rights.

Office Spaces

For professional services, IT companies, and corporate offices. Focus on connectivity, building amenities, and professional environment.

Warehouses & Godowns

For storage, distribution, and manufacturing support. Important factors include access, loading facilities, and fire safety.

Essential Commercial Clauses

  1. Clear description of permitted business activity
  2. Signage and branding rights
  3. Operating hours and access
  4. Insurance requirements
  5. Fit-out and restoration obligations
  6. Goodwill and transfer provisions
  7. Competition restrictions (if any)
  8. Tax withholding responsibilities