What is a Commercial Lease Agreement?
A commercial lease agreement is the legally binding document that lays out the terms under which a business can occupy the landlord’s property and conduct business there. The document contains basic information about the property and details the rights and responsibilities of both parties.
When do you need to use a Commercial Lease Agreement form
At the time of renting the property for commercial or business use, a contract outlining terms and conditions needed to be signed by the property owner and business. This contract form is called a Commercial Lease form.
Why do you need to use a Commercial Lease Agreement form?
Unlike residential leases, a commercial lessee cannot rely on local housing laws and consumer protections to help protect their rights. Commercial tenants can only claim those rights that are explicitly stated in the lease agreement. So, tenants need to declare all terms clearly before renting the property. For this purpose, a commercial lease form is used.
In case of dispute, this form works as proof for both parties, property owner and business.
What are the main things that go on a Commercial Lease Agreement form?
Common commercial lease terms include the following:
1. Rent Clause
It clearly states everything related to renting, such as:
- What is the basic rent?
- Will rent remain the same for the whole year?
- Do tenants have to pay other charges such as building insurance, property taxes, and routine maintenance in addition to basic rent?
2. Lease Term
In this section of the form, all such terms and conditions are addressed.
- The exact time of the lease, starting and ending date.
- Do both parties or one of them have the right to extend or terminate the contract after a certain period?
3. Security Deposit
Unlike residential security deposits, a commercial landlord can ask for whatever they want. In this section, it is clearly stated:
- Who will pay for security deposit landlord or business and till when?
- What is the amount of security deposit?
4. Premises Clause
If tenants rent the whole building, then it usually needs no details on the commercial lease form. The building address is enough. However, if tenants rent the specific portion of the building, then it needs sufficient detail to be mentioned in the form.
What are the most common mistakes to avoid?
As we mentioned above, tenants can claim no rights except that are already mentioned on the commercial lease form. Usually new business owners are not aware of the importance of this contract, so they make severe mistakes at the time of settlement. Do not be among one of them and state and read all terms and conditions carefully.
- Precise Language
In commercial lease form, wherever you are talking about time, be specific. Use the precise language instead of broad clauses.
- Description of Premises Clauses
It is a highly critical section of the agreement. Must clear the doubts about permitted use and exclusive use policy. As a tenant, can you use rented space for only specific commercial activities or have the proprietary rights to perform certain actions within a larger property with many tenants.
- Maintenance Clause
Explicitly mention, who is responsible for maintenance of the building. If tenants are accountable for resolving maintenance issues, then the landlord will compensate it in the rent or not.
- Parties Clause
While contract, must use their correct business name instead of using your actual name. It shields individuals from liability.
Do I need to use a lawyer, accountant or notary to help me?
You can easily create your Commercial Lease Agreement online without hiring any lawyer, accountant, or notary. Using a tool like ours creates a legally binding form, and saves you money because you don’t have to hire a lawyer.
Why use our Commercial Lease Agreement generator?
Our easy to use commercial lease agreement generator was created by a staff of lawyers and business experts, and you can have a one for a fraction of the cost you would pay an attorney. Our tool has a subscription plan so you can create unlimited commercial lease agreements at a low cost.