Commercial Lease Agreement Create a Commercial Lease Agreement

Commercial Lease Agreement

Updated Dec 13, 2025
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A Commercial Lease Agreement is a contract outlining terms for leasing commercial property, detailing rights and responsibilities of both parties.

Lease Type

Select the lease structure. Triple Net (NNN): Tenant pays base rent plus property taxes, insurance, and maintenance. Modified Gross: Landlord and tenant share expenses. Full Service Gross: Landlord covers most expenses.

Table of Contents

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COMMERCIAL LEASE AGREEMENT

I. THE PARTIES

This Commercial Lease Agreement (the "Agreement") is entered into on , by and between:

Landlord:
, with a mailing address of (hereinafter referred to as the "Landlord"), AND

Tenant:
, with a mailing address of (hereinafter referred to as the "Tenant").

Landlord and Tenant are collectively referred to as the "Parties."

II. THE PREMISES

The Landlord agrees to lease to the Tenant, and the Tenant agrees to lease from the Landlord, the following described commercial property (the "Premises"):

Street Address:
City: State: Zip Code:

Description of Premises (e.g., Suite Number, Floor, Building Name):

The Premises consists of approximately square feet.

III. TERM OF LEASE

The term of this Lease shall be for a period of , commencing on (the "Commencement Date") and ending on (the "Termination Date").

IV. RENT

Base Rent: The Tenant shall pay to Landlord the sum of $ per month as Base Rent.

Payment Instructions: Rent shall be paid in advance on the day of each month. Rent shall be paid via:




Prorated Rent: If the Commencement Date is on a day other than the first day of the month, the rent for the first fractional month shall be prorated based on the actual number of days in said month.

Late Fee: If Rent is not paid within days of the due date, a late fee of $ or % of the monthly rent shall be assessed.

V. SECURITY DEPOSIT

Upon execution of this Agreement, the Tenant shall deposit with the Landlord the sum of $ (the "Security Deposit"). The Security Deposit shall be held by the Landlord as security for the faithful performance by the Tenant of all terms, covenants, and conditions of this Agreement.

The Security Deposit shall be returned to the Tenant within days after the expiration of the Lease Term, less any deductions for damages to the Premises beyond normal wear and tear or unpaid rent.

VI. USE OF PREMISES

The Premises shall be used for the following commercial business purpose(s):

The Tenant shall not use the Premises for any other purpose without the Landlord's prior written consent. The Tenant shall comply with all laws, ordinances, rules, and regulations of any governmental authority regarding the use, condition, and occupancy of the Premises.

VII. OPERATING EXPENSES AND UTILITIES

The Parties agree that the responsibility for expenses shall be allocated as follows (Check One):

Utilities: The Tenant shall be responsible for the direct payment of the following utilities (Check all that apply):







VIII. FURNISHINGS AND FIXTURES

The Premises is being leased (Check One):

IX. PARKING AND SIGNS

Parking: The Tenant shall be entitled to parking spaces located at: .

Signs: The Tenant may install signs on the Premises subject to the Landlord's written approval and compliance with all local zoning ordinances and regulations.

X. MAINTENANCE AND REPAIRS

Landlord's Obligations: The Landlord shall be responsible for maintaining and repairing the structural elements of the building, including the roof, foundation, and exterior walls, as well as building systems (HVAC, plumbing, electrical) unless damage is caused by the Tenant's negligence.

Tenant's Obligations: The Tenant shall maintain the interior of the Premises in good condition and repair, including keeping the Premises clean, sanitary, and free from waste.

XI. INSURANCE

Tenant's Insurance: The Tenant shall maintain, at its own expense, a comprehensive general liability insurance policy with a minimum coverage of $ per occurrence and $ in the aggregate. The Landlord shall be named as an additional insured on said policy.

Landlord's Insurance: The Landlord shall maintain insurance on the building and common areas against fire and extended coverage risks.

XII. ALTERATIONS AND IMPROVEMENTS

The Tenant shall not make any alterations, additions, or improvements to the Premises without the prior written consent of the Landlord. Any improvements made by the Tenant shall become the property of the Landlord upon termination of this Lease, unless the Parties agree otherwise in writing.

XIII. DEFAULT AND REMEDIES

If the Tenant fails to pay Rent when due or fails to perform any other provision of this Agreement, and such failure continues for days after written notice from the Landlord, the Tenant shall be in default.

Upon default, the Landlord may:

  1. Terminate this Agreement and recover possession of the Premises.
  2. Recover all unpaid Rent and future Rent due under the unexpired term (subject to the Landlord's duty to mitigate damages).
  3. Pursue any other remedies available at law or in equity.

XIV. SUBLETTING AND ASSIGNMENT

The Tenant shall not assign this Agreement or sublet any portion of the Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed.

XV. ESTOPPEL CERTIFICATE

Tenant shall, at any time upon not less than ten (10) days' prior written notice from Landlord, execute, acknowledge, and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or if modified, stating the nature of such modification) and the date to which the Rent and other charges are paid in advance, if any.

XVI. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of .

XVII. NOTICES

All notices given under this Agreement must be in writing. A notice is effective upon receipt and shall be delivered in person, by overnight courier service, or by certified or registered mail, addressed to the Landlord or Tenant at the address stated in Section I or to another address that either Party may designate upon reasonable notice to the other Party.

XVIII. AMERICANS WITH DISABILITIES ACT

The Parties acknowledge that the Americans with Disabilities Act (ADA) may require modifications to the Premises depending on the Tenant's specific use. Responsibility for ADA compliance is allocated as follows:

XIX. ADDITIONAL TERMS AND CONDITIONS

XX. ENTIRE AGREEMENT

This Agreement contains the entire agreement of the Parties and there are no other promises, conditions, understandings, or other agreements, whether oral or written, relating to the subject matter of this Agreement. This Agreement may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.

XXI. SEVERABILITY

If any portion of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.

LANDLORD SIGNATURE

Signature: ________________________
Date:
Print Name: _______________
Title (if applicable):

TENANT SIGNATURE

Signature: ________________________
Date:
Print Name: _______________
Title (if applicable):

WITNESS SIGNATURE (OPTIONAL)

NOTARY ACKNOWLEDGMENT

State of
County of

On this , before me, , personally appeared _______________ (Name of Landlord) and _______________ (Name of Tenant), known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument.

WITNESS my hand and official seal.

Signature of Notary Public: ________________________
Date:
Print Name: _______________
(Seal)
My Commission Expires:

What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a formal document that outlines the terms and conditions under which a commercial property is rented. It serves as a legally binding contract between a landlord (often referred to as the 'lessor') and a tenant (or 'lessee'), who is renting the commercial space for business purposes, such as retail, office, or industrial use. This agreement specifies details including rent amount, lease duration, responsibilities of each party, and other critical terms necessary for both parties' protection and understanding. Businesses seeking a physical location to operate must engage in this type of lease to secure their operational space legally. Landlords offering commercial properties for rent also require this document to ensure that the terms of the lease are clear and enforceable, minimizing potential disputes and misunderstandings.

Key Features

Clearly defines the rights and responsibilities of both the landlord and the tenant to prevent future disputes.
Includes specific provisions regarding the use of the property, ensuring that it is used only in ways that are acceptable to the landlord.
Details financial obligations such as rent payments, security deposits, and any additional fees, providing transparency.
Outlines maintenance and repair responsibilities, specifying who is responsible for various types of upkeep.
Specifies conditions under which the lease may be terminated or renewed, offering predictability for both parties.
Addresses compliance with local laws and regulations, ensuring that both parties understand their legal obligations.

Important Provisions

  • Rent Details: Specifies amount, payment schedule, and whether it's based on gross rent vs triple net lease structure.
  • Term of Lease: Defines start date, duration (fixed term or month-to-month), and renewal options if any.
  • Use of Premises: Clearly outlines acceptable uses of the property to ensure they align with zoning laws and landlord's preferences.
  • Maintenance and Repairs: Allocates responsibility between landlord and tenant for maintaining the property in good condition.
  • Termination Clauses: Describes conditions under which either party may terminate the agreement prior to its natural expiration.

Pros and Cons

Pros

  • +Provides a structured framework for negotiating terms that are fair and equitable to both landlord and tenant.
  • +Reduces ambiguity by detailing all aspects of the lease arrangement, from rent payments to property use restrictions.
  • +Legally enforces the obligations of each party, offering a level of security and predictability in commercial leasing transactions.
  • +Facilitates dispute resolution by referring back to agreed-upon terms documented within the agreement.
  • +Adaptable to various types of commercial leases including gross rent vs triple net leases.

Cons

  • -May require negotiation and legal consultation to address specific needs or concerns of either party effectively.
  • -Could potentially lock parties into long-term commitments without sufficient flexibility for changing business needs or market conditions.
  • -Requires thorough understanding by both parties to ensure that the agreement accurately reflects their intentions and agreements.

Common Uses

  • Leasing retail spaces such as stores within shopping centers or standalone buildings.
  • Renting office spaces, including individual offices or entire floors in office buildings.
  • Industrial uses like manufacturing facilities or warehouses.
  • Leasing land for development projects or agricultural purposes.
  • For businesses requiring special-purpose buildings like restaurants, clinics, or fitness centers.
  • Subleasing part of a commercial space by an existing tenant to another business.

Frequently Asked Questions

In a gross rent lease, tenants pay a fixed rent that covers all property-related costs like taxes, insurance, and maintenance. Conversely, a triple net (NNN) lease requires tenants not only to pay base rent but also part of these additional costs separately. The choice between these types affects overall expenses for tenants.
The duration varies significantly depending on mutual agreements; it could range from less than one year (often termed as 'short-term') up to several years ('long-term'). Renewal options may also influence total length.
While early termination clauses can be negotiated into your agreement providing conditions under which you might exit early, terminating without such clauses could result in penalties.
Yes. While our template provides a comprehensive structure covering various scenarios in commercial leasing arrangements, we strongly advise tailoring specific clauses to fit your unique situation.
In case of breach by either party, remedies available include seeking damages through litigation or arbitration. Specific consequences should ideally be outlined within your agreement's provisions on defaults and remedies.

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