Create your Commercial Lease Agreement

Frequently Asked Questions

What is a commercial lease?A commercial lease is a legally binding contract made between a landlord and a business tenant. The lease gives a tenant the right to use certain property for a business or commercial activity for a period of time in exchange for money paid to the landlord. Additionally, the lease outlines the rights and responsibilities of both the landlord and tenant during the lease term. LegalContracts provides a written Commercial Lease Agreement.Why do I need a written lease?A lease provides clarity. It clearly outlines the boundaries and responsbilities for both the landlord and the tenant. Moreover, the problem with oral agreements is that they can be difficult to enforce. In a dispute, a court hears evidence to decide whose version of the story to accept. If there is a written agreement, the courts are generally obligated to uphold the terms of the written agreement.

Customized Lease

Built for
Different states have different rules and regulations. Your Commercial Lease Agreement will be customized for .



Frequently Asked Questions

How will my Lease will be customized?The laws of the state you select will be used to enforce this agreement and will be used to help resolve any disputes.What is the difference between the short and long versions?The Long Version of the Lease includes additional clauses and terms that will make your lease more precise, able to deal with more situations and easier to enforce as well as the ability to revise standard clauses in our lease.

The Short Version omits those terms that may not be absolutely necessary to express your lease and doesn't give the option of revising standard clauses.
Which standard clauses can be revised?In the Long version, the following standard clauses can be revised: insurance, inspections, renewal of lease, signs, damage to premises, landlord's repairs, tenant's repairs, hazardous materials, right to show premises and force majeure.

Landlord Details

Landlord

(e.g. Street, City, State, Zipcode)
Frequently Asked Questions

How should I fill out the questions?Fill in the appropriate information at your own pace. You're not required to fill out everything at once. A blank space is generally provided in the form that can be filled in later if you are missing information about one of the parties. You may also come back to the question page to fill out the missing information at your leisure.

Tenant Details

Tenant

(Leave blank to omit)
(e.g. Street, City, State, Zipcode)
(Leave blank to omit)
(Leave blank to omit)
Frequently Asked Questions

What is the operating name?The ""operating name is the name of the tenant's business that is used in its advertising.For Scottish companies use a SC prefix and for limited liability partnerships, use an OC prefix. For foreign companies give territory in which incorporated.

Guarantor

Frequently Asked Questions

What is a guarantor?A Guarantor or Surety is a person who agrees to pay any losses directly to the landlord should the tenant be unable to pay the rent, or otherwise breach the tenancy agreement. Third party guarantors, such as shareholders of a corporate tenant, would be required to execute a personal guarantee or indemnity agreement.Typically, A landlord prefers the guarantor or indemnitor to execute an indemnity agreement instead of a guarantee.

Leased Premises

(e.g. Suite #, Building Name, Street, City, State, Zipcode)

Frequently Asked Questions

Do I need to further describe the Premises?You may include a diagram, specific area measurements, legal description and any further description for the property. This is not required but you may include these additional information if you feel it will further clarify the boundaries of the Premises.The legal description of the premises refers to how the property is identified in real estate legal transactions. The description can be found in a deed, mortgage, or other purchase document or may be obtained from a county recorder, land titles office, tax assessor, or other similar official.

Permitted Use of Premises

(brokerage office, real estate agency, financial institution, etc.)

Exclusive Use means no other tenant in the Building will be able to conduct as its principal business the same Permitted Use as this Tenant.
Frequently Asked Questions

How is the tenant allowed to use the premises?The tenant can only use the leased property for purposes that have been approved by the Landlord. The "permitted use of premises" clause limits the tenant to engage in certain types of business only. Before allowing the tenant to use the property for additional purposes that are not stated in the Lease, the tenant needs to obtain the consent of the Landlord.

Parking

Lease Term

RadDatePicker
RadDatePicker
Open the calendar popup.
RadDatePicker
RadDatePicker
Open the calendar popup.

Early Possession
Frequently Asked Questions

What are the different types of lease terms?Fixed End Date

A lease with a fixed end date gives certainty of term for both the landlord and the tenant. It specifies the exact day the tenancy will end. The advantage here is that neither party has to give notice to terminate the lease, it simply ends on the specified date. In a fixed end date lease, the landlord cannot increase the rent, or change any other terms of the lease unless he specifically reserves the right in the lease, and the tenant agrees to the changes. If the tenant remains past the specified date the landlord can either: (a) accept rental payments and have the lease continue as a month-to-month tenancy with the same rules as the expired fixed end date lease; (b) sign a new lease; or (c) start eviction proceedings against the tenant.

Fixed Number of Weeks/Months/Years

A lease for a fixed number of weeks/months/years gives a start date for the lease and the number of weeks/months/years that the lease will run (for example: the lease could start on September 1, 2005 and then continue for a period of 18 months). The advantage here is that neither party has to give notice to terminate the lease, it simply ends on the specified number of weeks/months/years. In a fixed term lease, the landlord cannot increase the rent or change any other terms of the lease unless he specifically reserves the right in the lease, and the tenant agrees to the changes. At the end of the specified period, the landlord can either: (a) accept rental payments and have the lease continue as a weekly/monthly/yearly tenancy with the same rules as the expired fixed end date lease; (b) sign a new lease; or (c) start eviction proceedings against the tenant.

Periodic

A periodic tenancy (a weekly/monthly/yearly lease with automatic renewal) will continue until one of the parties terminates the lease. To terminate the lease, the landlord or tenant must give notice of their intention to terminate as specified by statute. A landlord can usually raise the rent, or change the terms of the lease in these types of agreements by providing proper notice as required by statute. At the end of the notice period the tenant must move out or the landlord can start eviction proceedings against the tenant.
What is automatic renewal?Automatic Renewal means that the lease continues indefinitely on the agreed upon period (weekly, monthly, or yearly) until either the tenant or the landlord gives notice to the other party that they will be terminating the lease.What is early possession and why is it used?A Tenant might be given possession of the Premises before the lease start date where the Tenant needs to perform leasehold improvements.

Rent

Percentage Lease refers to a specific type of rental arrangement that applies mainly to retailers, especially in shopping centers or multiple-tenant malls. In a percentage lease, the tenant pays a fixed or base rent plus a percentage of gross revenue.

Base Rent is the minimum or base amount of rent payment as set out in the lease excluding percentage rents or any other additional or operating costs.
A Base Rent Lease or Gross Lease is a type of commercial lease where the tenant pays only the base rent and other expenses with respect to the Premises. The landlord pays all other expenses associated with operating and maintaining the property.

Base Rent is the minimum or base amount of rent payment as set out in the lease excluding percentage rents or any other additional or operating costs.
A Base Rent plus Specified Costs Lease is a type of commercial lease where the tenant pays the base rent and any specified operating expenses with respect to the Premises and the landlord pays all other expenses associated with operating and maintaining the property.

Base Rent is the minimum or base amount of rent payment as set out in the lease excluding percentage rents or any other additional or operating costs.

Operating Expenses may include insurance, utilities, maintenance expenses, taxes, cleaning, security, repairs, supplies, etc.
A Base Rent plus all Operating Costs Lease is a type of commercial lease where the tenant pays the base rent and its share of operating expenses with respect to the Premises and common areas. The Tenant's share may be proportionate or some other formula. and the landlord pays all other expenses associated with operating and maintaining the property.

Base Rent is the minimum or base amount of rent payment as set out in the lease excluding percentage rents or any other additional or operating costs.

Operating Expenses may include insurance, utilities, maintenance expenses, taxes, cleaning, security, repairs, supplies, etc.
(e.g. With the 'Base Rent Plus Specified Operating Costs' option, you can have base rent plus you can also specify additional charges such as cleaning, security, repairs, supplies, utilities, maintenance and insurance.)

per month
(e.g. 500.00)

(Proportionate Share is typically used in a triple net lease)

Frequently Asked Questions

What is base rent?Base Rent is the minimum or base amount of rent payment as set out in the lease excluding percentage rents or any other additional or operating costs.What is a base rent lease or gross rent lease?A Gross rent lease is a type of commercial lease where the tenant pays a fixed rent (sometimes the tenant will be required to pay a fixed base rent plus certain specified expenses with respect to the Premises) and the landlord pays all other expenses associated with operating and maintaining the property. Operating expenses may include insurance, utilities, maintenance expenses and sometimes taxes.What is a percentage lease?A percentage lease refers to a specific type of rental arrangement that applies mainly to retailers, especially in shopping centers or multiple-tenant malls. With a percentage lease, the tenant pays a fixed or base rent plus a percentage of gross income. To create this type of rental arrangement, have the tenant pay "Base Rent plus % of Gross Profits".An FRI lease means a full repairing and insuring lease where all costs of maintenance and repair and the cost of insurance (whether insured directly or through the Landlord) are met by the Tenant.

Rent Payment

(e.g. first, tenth)
(leave blank to not specify it in lease)

Rent Increase and Late Payments

Rent Increase

Late Payments

Utilities and Other Expenses

Who is responsible for paying the following utilities for the Premises?

Tenant Pays
Direct
Tenant Pays
Landlord
Landlord
Pays

Do Not
Specify

Frequently Asked Questions

How should the different costs be listed?Taxes and insurance should not be dealt with in this Utility section. They are dealt with later in the questions. Operating costs such as security, snow removal and collection of garbage are typically covered where the rent is a base rent plus "all operating costs". If you want to specifically name them with such rent, you will have to add them as other expenses below. Where the rent is a base rent plus specified operating costs, you can deal with those specific operating costs under the "Operating Costs" section below.

What is "Tenant Pays Direct" for utilities?The Tenant is billed directly and pays this expense directly to the provider of that utility. This expense would be in addition to any amounts paid to the Landlord for rent.What is "Tenant Pays Landlord" for utilities?The Tenant pays their share to the Landlord who then pays the amount to the supplier of that utility. If the Tenant doesn't have a separate meter, it just pays its proportionate share of the total cost. This expense would be in addition to any amounts paid to the Landlord for rent.What is "Landlord Pays" for utilities?The Landlord pays any utility charges to the supplier of the utility and the Tenant is not directly responsible for this expense.

Taxes

Security Deposit


Frequently Asked Questions

What is advance or prepaid rent?Advance or prepaid rent is a sum of money paid on execution of a lease as a deposit for the payment of base rent for the beginning and or ending periods of the lease term. e.g. first and last month's rent.What is a security deposit?A Security Deposit is a sum of money the tenant pays to the landlord to guarantee that the tenant will fulfil all its obligations under the lease. The landlord holds the security deposit for the term of the lease to ensure that the tenant does not default on the terms of the lease agreement or otherwise damage the property. Should the tenant damage the property (normal “wear and tear” excluded) or if the Tenant has not paid rent, the landlord is entitled to recoup the debt from the security deposit. Usually the tenant must provide the landlord with the security deposit at the start of the lease term. At the end of the lease term, the tenant will receive the deposit back minus any deductions for repairs/restoration.How much should the security deposit be?Security deposits can vary from one up to three months rent depending upon the tenant and industry.What is an inspection report?An Inspection Report is completed by the tenant within a reasonable amount of time after the tenant takes possession of the property. This form contains a description of the condition of the property at the time of the tenant's possession, and is used at the end of the lease term as a comparison tool to determine if the tenant caused any damage to the property. The tenant should ensure that all damage is properly disclosed in this report to prevent a landlord from assuming the tenant has caused the damage.

Insurance

Who is responsible for obtaining and paying for the following insurance?

Tenant
Pays
Landlord
Pays

Do Not
Specify


Insurance Provisions


Type of Insurance Provisions:

Standard Wording

Revise Wording

Specify Insurance Amount

Do Not Specify


Frequently Asked Questions

What is the difference between Standard Wording and Revise Wording?For both the Landlord and the Tenant, select "Standard Wording" to have the standard insurance clauses for the commercial lease. If you wish to modify some of the terms of the standard clause, select "Revise Wording" to see the wording of the standard clauses and you may then edit the paragraph in the text box to change the terms to suit your needs.

Landlord Improvements

Frequently Asked Questions

What are leasehold improvements?A leasehold improvement is an expense incurred for the permanent improvement to the leased property. They are considered fixed assets and depreciate in value over the period of the lease.

Personal Property Provided by Landlord

Frequently Asked Questions

What are chattels?Chattels are personal property that are not fixtures. In other words, chattels are not attached (or not significantly attached) to the property. They can be moved from one location to another without damaging the property or the premises. Examples of chattels may include blinds or curtains, microwaves, refrigerators, desks and personal computers. What are fixtures?Fixtures refers to a piece of property that is sufficiently attached to the Premises so that to move or remove it would damage the property. If the attached part of the property can be removed without significant damage to the property then it is usually not considered a fixture. Examples of fixtures may include built in cabinets, sinks, toilets or wall-to-wall carpeting.

Tenant Improvements

Frequently Asked Questions

What are some examples of leasehold improvements usually done by the Tenant?Leasehold Improvements are fixtures or personal property that are significantly attached to the premises and can't be removed without damage to the personal property or the premises itself. Examples of improvements may include walls, door frames, doors, carpets, ceilings, side lights, air conditioning, electrical and mechanical upgrades, etc.

Personal Property Provided by Tenant

Frequently Asked Questions

What are chattels?Chattels are personal property that are not fixtures. In other words, chattels are not attached (or not significantly attached) to the property. They can be moved from one location to another without damaging the property or the premises. Examples of chattels may include blinds or curtains, microwaves, refrigerators, desks and personal computers. What are fixtures?Fixtures refers to a piece of property that is sufficiently attached to the Premises so that to move or remove it would damage the property. If the attached part of the property can be removed without significant damage to the property then it is usually not considered a fixture. Examples of fixtures may include built in cabinets, sinks, toilets or wall-to-wall carpeting.

Signing Incentives

Frequently Asked Questions

What are signing incentives?A signing incentive is an incentive or concession given to the tenant to enter into the lease, such as a period of free rent.What if I want to give one month free rent but payments are yearly or quarterly?Instead of selecting 'free rent' for the 'signing incentives' question, select 'specify below' and enter 'one month free rent'.

Clause Database

Frequently Asked Questions

What is the clause database?The clause database is a collection of standard clauses found in this commercial lease.How can I change these clauses in the clause database?If you answered "yes" in wanting to change some of our standard clauses, you should see a collection of check boxes appear instantly below the question.

Check off any of the topic that you wish to edit and each check box's corresponding clause will appear in a text box.

Just edit the words in the text box to suit your needs and click "Save and Continue" once you're satisfied with your changes.

This feature is only available in the long version of the Commercial Lease.

Additional Clauses

You can add an additional clause if there is some information, details, terms, conditions or restrictions that the Lease doesn't have but you want.
Drafting Tips

How should I refer to people and terms in the clause?Do not use several names or words to refer to the same person or thin as it could cause confusion and ambiguity by seemingly introducing new or different people or items.

Certain words were capitalized and defined already in this lease. For example, the renter is called the "Tenant", and the rental property is called the "Premises". Use the same predefined terms in your additional clauses.

Do not use pronouns such as: they, us, we, our, you, or me. Pronouns may be ambiguous and can cause confusion. (e.g. The Tenant shall keep the parking area free of heavy machineries, instead of He must keep the parking area patio free of heavy machineries.)
How do I draft the clause in plain English?Plain English means language that is simple and conveys ideas with the greatest possible clarity and avoids using legalese.

Legalistic StylePlain English
at the present time now
due to the fact that because; since
during such time aswhile
for the duration ofduring
inasmuch asbecause; since
in the event thatif
notwithstanding the fact that although; even if
prior to before
pursuant to under; in accordance with
subsequent toafter
that certaina
with reference toabout

Miscellaneous tipsDo not abbreviate words.

Use numerals, not words, to denote amounts.

Try not to repeat or contradict what has already been stated in the commerical lease agreement.

Only put one paragraph per additional clause.

Click here for additional tips

Notices upon Tenant's Default

(e.g. 3 days)
(e.g. 10 days)
Frequently Asked Questions

What does the notice for non-payment mean?If the Tenant hasn't paid any part of its rent when due, then upon giving the Tenant the amount of this notice for non-payment, the Landlord may terminate this Lease and re-enter the Premises.What does the notice for other lease breaches mean?If the Tenant has breached/broken/failed to comply with a requirement in the lease other than not paying any part of its rent when due, then the Landlord must give the Tenant this amount of notice for other lease breaches to fix or remedy this breach. If the Tenant doesn't fix this breach within that notice period, the Landlord may terminate this Lease and re-enter the Premises.

Renewal of Lease

Frequently Asked Questions

What is an option to renew lease?When the term of the lease is for a fixed period of time, the Lease will automatically end at the end of that period and the Tenant must surrender the premises at that time. An option to renew the lease is an option given to the Tenant to renew the lease prior to the end of the lease if they give notice to the Landlord no later than 60 days before the end of the lease.

If you want the tenant to be able to extend the lease term for that same period and same rent, then select the "yes with same terms" option.

If you want the tenant to be able to extend the lease term for that same period but a lease rate to be agreed upon when renewing, then select the "same terms except rent" option.

Select the "other" option if you want a different notice period or alternative wording in the renewal lease clause.

Miscellaneous





Frequently Asked Questions

What is the difference between assigning a lease and a sublease?Assigning the lease refers to the complete transfer of all rights to occupy the premises for the rest of the term from the current tenant to a third party.

A sublease is when the rights to use the property (or a part of the property) under a lease, is transferred by the current tenant to a third party for a portion of the remaining term of the lease.
When would the tenants have to have the carpets professionally steam cleaned?The tenants will be required to have the carpets professionally steam cleaned before the final move-out inspection occurs.

Option to Purchase





Frequently Asked Questions

What is an option to purchase?An option to purchase is an option that is given to a tenant to purchase the premises at a certain price during a certain period of time. The tenant may also have to pay an option fee.An Option Fee is a fee/deposit the tenant pays the landlord at the beginning of the term to have a right to purchase the Premises at a certain price during a certain time period. If the tenant proceeds with the purchase, the option fee is usually applied towards the purchase price. If the tenant does not exercise its option, then the landlord may keep this deposit.

Signing Details

Frequently Asked Questions

Who should sign the lease?
Both the landlord and the tenant, and any guarantor, if applicable, should sign the lease. Having witnesses to the parties' signatures provides greater evidence that the parties entered into the lease.

Loading ...
Loading ...

Note: Your initial answers are saved automatically when you preview your document.
This screen can be used to save additional copies of your answers.