Are you searching for property rentals in New York but do not know how to go through this process? Do you want to know more about the laws regarding commercial lease agreements? If this applies to you, please give the following article a full read to clear all your doubts.
If you are looking for a well-written template for a NY commercial lease agreement, you can choose one from CocoSign.
What Is a New York Commercial Lease Agreement?
The New York commercial lease agreement is an unbreakable contract between a property owner and an individual. This agreement allows the property owner to rent an industrial space.
A New York commercial lease typically allows a tenant to rent a property unit for three to five years. Where the tenants have the option to renew their NYC commercial lease at a predetermined rental rate.
If the landlord chooses to accept a new business, he/she usually requires a rental application. Additionally, a landlord may require a personal guarantee from the potential tenant. This assures that they are able to cover their rent if the tenant can’t make rental payments in the future.
These are a few simple ways to form a simple New York commercial lease agreement:
- Single Net Lease: The tenant holds the responsibility of paying the determined rental amount each month as well as the taxes. The landlord pays for the cost of the utilities and the maintenance of the commercial area.
- Double Net Lease: The tenant holds the responsibility of paying the utilities, taxes and determined rental amount each month. The landlord of the property unit pays for the expenses of the commercial area maintenance. This is a relatively rare New York commercial lease agreement
- Triple Net (NNN) Lease: The tenants hold the responsibility of paying the determined rental amount each month along with the utilities (water & electricity). They also pay for the taxes, common area maintenance, and all additional expenses related to the property unit.
- Modified Gross Lease: The tenants hold the responsibility of paying the determined rental amount each month. In addition to this, they pay for a fair portion of all the expenses related to the unit.
- Gross Lease: In this type of NY commercial lease agreement, the tenant is responsible for paying a fixed rental amount each month. Whereas, the landlord must take care of the expenses associated with the property unit and properly maintain the commercial area.
Required Disclosures for a Commercial Lease Agreement in New York
The law requires the landlord to inform potential tenants of all the terms and conditions of the NY commercial lease. The disclosure portion of the agreement usually contains details about the rent, utilities, etc.
- Federal Disclosure Requirement: If the property unit was built before 1978, under the federal law, landlords must disclose it. They should inform the tenants about a potential health hazard due to the use of lead-based paint.
- A Thorough Check-In List: Landlords must provide the tenant with a check-list to note any damages in the property unit before moving in. This saves them from extra charges at the time they choose to terminate the lease.
- Details About the Security Deposit: The agreement must include complete information regarding the security deposit of the rental unit. Moreover, it should indicate the duration the landlord has to return the deposit to the tenant once the lease expires.
- Non-Refundable Fees: The cost of a credit check, pet deposit, transfer of name for utilities, etc. are usually non-refundable in such lease. It is the duty of the landlord to inform the tenant what charges have been applied to him. Further, the landlord must also give the reason for applying these charges.
- Maintenance of Smoke Alarms: Although the landlord is responsible for installing smoke alarms, the tenant should also look out for their maintenance. The tenant must ensure that smoke alarms are always in working condition.
- Sex Offenders Registry: The landlord must inform the tenants if there are any registered sex offenders living near the rental unit. The tenants should try to find such information on the sex offenders database themselves.
- Bed Bugs: The landlord must inform the tenant about the presence of bed bugs in the rental unit or adjacent to the property.
What Are Included in a New York Commercial Lease Agreement?
Typically a NY commercial lease agreement depends upon the type of agreement that the parties sign. In general, a simple commercial lease agreement contains the following factors.
- Alterations & Improvements: tenants can only make alterations and repairs within the property if they have the landlord’s consent. In some cases, the landlord may even pay for the improvements.
- Parking terms: if the property offers a parking space, the tenant may have to pay for it each month.
- The rules and regulations of the building are essential to include.
- The agreement must state clearly if the rental unit needs any repairs or improvements.
- City municipal codes and regulations should be a part of the document.
- The penalty for making a rental payment past its due date is important to include in the lease document.
- The lease document should state whether the landlord permits the assigning or subletting of the property unit.
New York-Specific Considerations for Commercial Lease Agreement
Since NewYork is a lively and bustling city, it receives a large number of immigrants (both local and international) daily. As a result, living quarters and business spaces are a bit cramped.
Tenants must make sure that the ‘rentable square footage’, the landlord offers them, consists of maximal usable space. The difference between ‘rentable square footage’ & ‘usable square footage’ is known as the ‘loss factor.’
Landlords usually do not allow tenants to sublease or assign the rental unit to someone else. If the tenant plans to sublet, they must mention this in the lease to avoid unreasonable denials by the landlord.
Now with all the knowledge of the New York commercial lease agreement, you can get a lease contract template from CocoSign. CocoSign is always there to lend a helping hand by providing templates for different kinds of leasing and subleasing agreements.
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