Renting commercial space is a huge responsibility. Before you approach the landlord to rent a commercial space. It is important that you must ensure that you have a clear understanding of the basic terms of the commercial lease agreement.

A commercial lease template is available for the landlords to describe their property as per their convenience. To get a better understanding of the agreement template, keep reading.

What Is a Commercial Lease Agreement?

A commercial lease agreement is a document stating a contract between a landlord and a business owner. It places out the terms of a rental property. It is essential when a business firm chooses to rent out a property, instead of buying it. This is because it requires less capital investment.

Types of Commercial Lease Agreement

Several types of commercial lease lie beyond a simple monthly flat or annual rent agreement. Here is a list of the same:

Net Lease: Under this type of lease, the tenant has to pay all or part of taxes, maintenance cost, insurance, etc. All these would be incurred by the tenant in addition to the stated rent.

Double Net Lease: Under this type of lease the tenant is required to pay taxes, rent, and insurance.

Triple Net Lease: Under this lease, the tenant is required to pay maintenance, insurance, taxes, and rent.

Percentage Lease: Under this lease, the rent is based on a specified percentage of the sales of profit of the tenant.

Fully-Serviced Lease: Under this lease, the rent paid by the tenant includes utility and other services. All those services that the tenant would generally pay for separately. This lease is commonly applicable to office buildings used by multiple tenants.

What Are The Different Types of Commercial Properties?

The commercial property is commonly divided into five categories.

Office Buildings: This category of the commercial lease includes single-tenant properties and downtown skyscrapers. It also includes small professional office buildings and everything in between.

Retail/Restaurant: This category of the commercial lease includes paid sites on the singleton. It also includes retail buildings, highway frontages, small neighborhood shopping centers, and power centers with large anchors. Other than these large centers with grocery stores, anchor tenants, other regional and outlet malls also come under this category.

Multifamily: This category of the commercial lease includes high rise apartment buildings or apartment complexes.

Land: This category of the commercial lease includes investment properties on raw, undeveloped, or rural land. Properties which are on the verge for future development. It also provides infill and with an urban area, pad sites, and more.

Miscellaneous: This category of the commercial lease includes any other non-residential properties. Some of them being hospitality, self-storage development, hotels, medical, and many others.

When Is a Commercial Lease Agreement Needed?

If you are the owner of a building and you want to rent out your units in your building, then a commercial lease agreement is required. It is essential to memorialize everyone's obligation and clarify their expectations. When negotiating this type of commercial lease agreement, both the landlord and the tenant should clarify any concerns they have about the space.

Moreover, the state laws for the commercial rental agreement does not impose a minimum or maximum requirement on landlords. There are specific requirements and procedures in your state that applied to commercial landlords for tenants.

However, in some circumstances, a commercial lease agreement might continue to trump the default laws. It's essential for landlords and tenants to carefully negotiate the terms of the agreement to ensure the protection of the rights of both parties.

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Now, you have known the types of commercial lease agreements, types of commercial properties, and the terms of the agreement, you can get a free commercial lease agreement template online from CocoSign.

CocoSign is one such company offering different types of agreements. You can choose any type of rental or commercial agreement from us if you needed.

Commercial Lease Agreement FAQ

What Details Are Required In the Commercial Lease Agreement?

Every lease should identify who the tenant and landlord are. It should establish how long the lease will be in effect. Also, what terms the tenant must follow to occupy the space legally. The agreement may include many more provisions, such as provisions regarding property alterations, possible situations, amenities, other fees, or termination of the lease.

Can the Commercial Lease Agreement Be Negotiated?

Yes, a lease can be negotiated. You need to identify what you would like to add or negotiate with the landlord for this provision. There is nothing wrong with creating an arrangement to support yourself. Most of the landlords will agree to reasonable negotiations. A healthy relationship between both parties would allow them to work together to get what they need.

Must the Commercial Lease Agreement Be Signed at the Time of Receiving It?

No, it is not necessary to sign the lease at the time of receiving. Instead, you should take the lease and review it. It would be beneficial for you if you let an attorney review the lease as well.

What Are The Basic Elements of a Commercial Lease

The clauses included in the commercial lease agreement varies depending on the type of business. However, here are some of the important elements to be in almost every commercial lease agreement:

  • Starting and termination date of the lease
  • Name of the landlord, tenant, company and property details
  • The interval of rent payment
  • Rent amount, deposit sum and maintenance charges

Can the Commercial Lease Agreement Be Changed After It is Signed?

Just like any contract, the lease is unchangeable once signed. However, the terms of the agreement are changeable or alterable. All the altered changes must appear in the lease. The changes can be anything related to any possible circumstances. Some of them being financial trouble for either party, damages or destruction caused due to natural causes, etc.


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