Putting up a property for a lease is one of the businesses that never goes out of trend especially if the property is not limited for residential purposes which means that it is suitable for commercial or business companies as well. For this, a commercial lease agreement form must be created and signed by both the lessor and the lessee. The lessor is the owner of the property being leased while the lessee is the tenant or the renter.
Commercial Lease Agreement Form Sample
What Is a Commercial Lease Agreement Form?
A commercial lease agreement form is a document which is significantly used by individuals whose aim is to achieve a negotiation regarding a commercial property which will be leased out or be rented out. Unlike common lease agreements, this document is only intended to be created and used if the goal of a tenant is not to reside or live in the property which is being offered by the landlord and owner, rather the objective must be to use the property or be a renter of the property for commercial or business purposes.
Agency Commercial Lease Agreement Form
Why Is a Commercial Lease Agreement Form Important?
A commercial lease agreement form is important due to the following reasons:
To document the finalized negotiations of the involved parties who are the lessor and the lessee of the lease agreement.
This is the main reason why making a commercial lease agreement is important for anyone who will be involved in a lease, be it the landlord, the owner, or the prospective tenant of the property. It is also essential that after the form is finalized, printed, and signed, duplicate copies will be given to each party as well as the lawyer or the attorney and the agency broker who helped in finalizing the agreement.
To have a legal ground and meet legal requirements.
In the event that someone or a party involved breaches the agreement and have failed to meet the expectations or obligations assigned to him, the other party can execute the process in lieu of the failure such as to terminate the agreement contract form or to mandate a fee to be paid by the violating party. This, however, can only be executed if a contract or the agreement is made to properly justify to the court and with a legal standing that one of the parties indeed have violated. Moreover, States and countries also require renters of commercial properties to provide a signed lease agreement form as part of their business requirements. The form will serve as one of the legal forms that will prove the location of the business and the validity of the business owner’s claims.
To indicate the payment and fees.
In the lease agreement form, the amounts stated to be paid by the renter must be detailed in order for the renter to understand and know what fees comprise the payment. If there are taxes, additional payments, percentages to meet for installment payments, and late payment fees, then each must be identified and explained in the commercial lease agreement form.
Commercial Unit Lease Contract Agreement Form
Essential Sections of Commercial Lease Agreement Forms
When making or using any commercial lease agreement form variety, it is important to check the contents of the form in order to make sure that it contains the essentials along with the basics of an effective lease agreement:
- The identification of parties –The names of the landlord or owner and the renter must be stated in this section of the form. It will also state their roles of whether they are the renter or the landlord as well as their addresses.
- The description and use of the premises – This section of the form is for stating the address if the premises or the offered property. There should also be an included clause regarding the use of the stairs and other amenities or access points in the property to be rented such as stairs, gates, elevators, and escalators. How the premises will be used by the renter must also be defined which is specifically for business and commercial intents. This is to clearly document that the lease was made for businesses and not for residential purposes.
- Term and rent information – When the lease will start and its end date is significant for knowing the commencement period of the lease and the agreement as well. In addition, the details of the lease or the rent ranging from the security deposit up to the rent adjustments will then be defined as well. These pieces of information are significant to be informed to the renter for him to know what he must consider and take note prior before he will be affixing his signature in the lease agreement.
- Escalations – There are three common types of escalations which are important to be included and discussed in a commercial lease agreement: tax escalations, operating cost escalations, and consumer price escalations. The tax escalation centers on indicating the obligation of the lessor or the person leasing the property in giving a refund of the excess real estate tax, if there are any, to the lessee or the renter. Operating cost escalations are for defining the obligation of the lessee or tenant in providing additional payments for the operating cost of the property when increased by the lessor or the property owner. Lastly, the consumer price escalation is intended for explaining the relativity of the increase in the rental payments and fees according to the consumer price changes or adjustments of the State or country where the property is registered and located.
Multi-Tenant Facility Commercial Lease Agreement Form
- Insurance, maintenance, alterations obligations – Fire insurance, maintenance needs, and fees, as well as construction or property alterations, should also be enlisted in the agreement. The reason why these must be included is due to the financial responsibility associated with it. On the other hand, the responsibility of the lessee or the renter is paying for the damages incurred during his lease in the commercial property will also be essential to be stated to fully acknowledge and inform the lessee before the lease starts for him to take care of the property.
- Subleasing and subordination clauses – Some lessors permit subleasing while some do not. This is why a subleasing and subordination clause must be stated in the agreement. If the lessor or the landlord does not allow the renter to sublease the property, then it must be indicated in the form that subletting is not permitted. While if the landlord permits a subleasing to occur, then there must be a requirement to create and finalize a sublet agreement form as a separate document for enlisting the terms and conditions of subleasing. The subordination clause, on the other hand, is for stating that the lease will be a subject and will be a subordinate to any and all mortgages, loans, trust, and deeds during the period of the lease.
- Indemnification and liability – This section is aimed at protecting the landlord or the lessor of the commercial property. The statements in this section should center on the waived rights of the lessee or the renter regarding filing any claims in the property. The lessor will be held harmless during the period of the lease.
- Default and bankruptcy – In this section, the actions to be taken by the lessee or the renter when he chooses a default will be identified such as sending a written notice ten days prior to the day of the default. When and how the bankrupt will be declared will also be included in this section of the form especially if there are outside parties involved including bank creditors and loan providers.
Short-Term Commercial Lease Agreement Form
- Notice responsibilities – It is expected that there will be notice forms to be sent from one party to another during the term of the lease which is why adding how each notice will be provided and the number of days to be observed in sending the notice must be clarified in the agreement as well in this section.
- Surrender upon termination – The actions which are expected to be taken by the lessee or the renter during the termination of the lease will be main focus of this section such as removing paints, fixtures, returning keys to the landlord, and even providing payments for all the property’s damages before the lease is closed or have ended.
- Other provisions – This is where additional statements, clauses, obligations, and responsibilities will be stated and explained.
- Witness statement and signature block – Every lease agreement or any legal agreement form will end with a signature block. And in a commercial lease agreement, all involved parties, along with the broker’s signature and a witness statement to be fulfilled by a notary public or attorney.
Standard Commercial Lease Agreement Form
A commercial lease agreement form is not a type of document which can be taken lightly especially if the property rented out is a huge property for a business. Reviewing and rechecking the entire document must be conducted by both parties, not only in the original document that they signed but also in the duplicate that they will be keeping as their personal copies.
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