Commercial Lease Agreement

A commercial lease agreement is essential for landlords and tenants leasing commercial property. Through this template description, you will understand everything you need to know about a commercial lease agreement, including their different types and key terms. 

An example of a commercial lease agreement is a preformatted document that outlines the terms and conditions of a commercial lease. It is a starting point for landlords and tenants, creating a legally binding agreement tailored to their needs. You can find a free simple commercial lease agreement template on Lawrina in PDF or Word that you can download and adapt to your unique situation.

A corporate lease agreement is a legally binding contract between a landlord (property owner) and a tenant (business owner) that outlines the terms and conditions for renting a commercial property. These basic commercial lease agreements are typically for office spaces, retail stores, warehouses, and other commercial buildings. They are crucial for ensuring both parties understand their rights and responsibilities during the lease term. 

The following are standard commercial lease agreement provisions that are essential for landlords and tenants. They must be properly represented on the commercial lease contract sample:

These are the three common types of month-to-month commercial lease agreements that can be used to draft a typical lease agreement template:

The tenant pays a fixed rent sum in a gross lease, and the landlord is liable for all property-related costs such as property taxes, insurance, and upkeep. Tenants choose this lease because they don't have to worry about fees beyond the agreed-upon rent. This type of free office lease agreement is suitable for tenants who prefer predictable rental costs.

The tenant pays a base rent and a percentage of the property's operational expenditures, such as taxes, insurance, and maintenance, under a net lease. This type of printable tenant lease agreement typically specifies the actual expenses the tenant is responsible for.

A triple net lease, sometimes known as a NNN lease, is a type of net lease in which the tenant is responsible for paying the base rent and all running expenditures for the property, such as property taxes, insurance, and maintenance. This type of free commercial lease agreement is more advantageous for landlords because it shifts most of the financial risk and responsibility to the tenant.

In making a lease for free and using a commercial lease agreement template, there are two primary types of lease terms for commercial properties: fixed-term and periodic. Having a proper understanding of these types will help you choose the right commercial lease agreement that suits your needs. 

A fixed-term lease has a specific start and end date, typically one to several years. This type of lease provides both the landlord and tenant with stability and predictability, as the lease terms remain unchanged for the agreed-upon duration. However, it may be less flexible for the tenant if their business needs change during the lease term.

A periodic lease, known as a month-to-month lease, has no specific end date and can be terminated by either the landlord or tenant with proper notice, usually 30 days. This type of lease offers greater flexibility for both parties, allowing them to adjust the terms or end the lease as their needs change. However, it may also result in less stability, as no long-term commitment exists.

Commercial properties are spaces used for business, such as offices, retail stores, warehouses, restaurants, and other commercial buildings. Business owners who need a physical location to operate or store their inventory lease these properties.

A well-drafted commercial lease agreement template should cover various aspects to protect the landlord and tenant. Using a free commercial lease agreement can help you save on legal costs. Some key components to include are:

To write a comprehensive commercial lease agreement template, follow these steps:

When drafting a commercial lease agreement template, start by stating the effective date of the lease agreement. It is when the lease terms begin and become legally binding for both parties.

Include the landlord and tenant's full names, addresses, and contact information. This information is crucial for identifying the parties involved in the lease agreement.

Describe the commercial property being leased, including its address, square footage, and any unique features or amenities. This information helps to clarify the property's boundaries and characteristics.

Outline the lease term, including the start and end dates or the renewal options for a periodic lease. This section should also specify any penalties or fees associated with early termination or failure to renew. Using a free commercial lease agreement by Lawrina can help streamline the leasing procedures.

Specify the rent amount, payment schedule, and any late fees or penalties associated with missed or late payments. This section should also include details about rent increases, if applicable.

Indicate how property taxes will be allocated between the landlord and tenant. Sometimes, the tenant may be responsible for paying some or all property taxes.

Include provisions for handling past due payments, such as grace periods, late fees, and the landlord's right to terminate the lease for nonpayment.

Specify the security deposit amount and the conditions under which it may be withheld or returned to the tenant.

Outline the terms for handling a holdover situation in which the tenant continues to occupy the property after the lease term has ended. This section should detail any additional fees or penalties associated with holdover and the landlord's right to evict the tenant if necessary.

Clearly define the permitted use of the property, any restrictions on occupancy, and the condition in which the tenant is expected to maintain the premises. This section may also include any required property improvements or alterations.

List any fixtures, equipment, or other property in the leased space, and clarify the ownership and maintenance responsibilities.

Describe the responsibilities of both parties for repairs and maintenance, including routine tasks, emergencies, and the process for requesting and approving repairs.

Outline the insurance requirements for both the landlord and tenant and include indemnification clauses to protect both parties from liability for damages or injuries related to the leased property.

Provide guidelines for any signage the tenant may install on the property, including size, location, and approval requirements.

Specify which utility services the tenant is responsible for and any restrictions or requirements related to their use.

Describe the terms for granting access to the property, the process for surrendering the property at the end of the lease term, and any restrictions on the tenant's ability to assign or sublease the property.

Detail the responsibilities of both parties in the event of damage to the property, including who is responsible for repairs and how insurance proceeds will be allocated.

Explain the rights and responsibilities of both parties if the property becomes subject to eminent domain, which is the government's power to take private property for public use.

Outline the events that constitute a default under the lease and the remedies available to the non-defaulting party, such as termination, damages, or specific performance.

Include any additional provisions or clauses relevant to the lease, such as dispute resolution methods, governing law, and entire agreement clauses.

When leasing commercial property, a commercial lease agreement is essential for both landlords and tenants. You can maximize the use of a commercial lease agreement template for an easier workflow and legal protection of both parties.

A commercial lease agreement template helps to:

A commercial lease agreement is optional when the property is used for residential purposes or when a short-term, informal arrangement is sufficient for both parties. All of these are put into consideration in the commercial lease agreement template.

Residential leases are often highly regulated with some terms that cannot be changed by law even if both parties agree to waive those terms. But commercial leases have virtually no restrictions beyond basic contract law, except the Americans with Disabilities Act (ADA) which requires business spaces open to the public and accessible to those with disabilities. The law requirements depend on the size of the business, the type of business, and the age of the building or the time since it was last renovated. Tenants have primary responsibility for ensuring their business is ADA-compliant. However, they may wish to negotiate for a lease that requires the landlord to make ADA upgrades or to maintain ADA compliance, such as continued elevator access.

Moreover, some states have their requirements for commercial lease provisions. For instance, Ohio requires that your commercial lease of three or more years not only be signed but must be notarized in order to be valid. 

In California, the landlord must return the deposit no later than 30 days after the landlord receives possession of the premises (Cal. Civ. Code § 1950.7(c)). In Idaho, it’s 21 days after the tenant surrenders the premises or up to 30 days by prior agreement (Idaho Code § 6-321).

In Louisiana, the landlord must return the deposit within one month after the lease terminates (La. R.S. 9:3251(A)). This requirement does not apply if the tenant abandons the premises either without required notice or before the lease terminates (La. R.S. 9:3251(C)).

In South Dakota, the landlord must return the deposit within 60 days after the tenancy terminates and the landlord receives the tenant’s mailing address or delivery instructions (SDCL 43-32-24.1).

In Texas, the landlord must return the deposit within 60 days after the date the tenant surrenders the premises and provides notice to the landlord or the landlord’s agent of the tenant’s forwarding address (Tex. Prop. Code Ann. § 93.005(a) and 93.009(a)). 

In New York, a commercial landlord must hold a tenant’s security deposit in trust on behalf of the tenant and may not commingle the security deposit with the landlord’s personal funds or make the deposit an asset of the landlord (N.Y. Gen. Oblig. Law § 7-103(1)). If the landlord chooses to place the deposit in a bank, it must be a bank with a place of business in New York (N.Y. Gen. Oblig. Law § 7-103(2)).

Therefore, consulting with a knowledgeable US attorney is essential to ensure compliance with local laws and regulations.