Business owners need a decent and accessible place to trade their products for money. Before they can rent, a landlord must assess their rental, bank, and credit history to make sure that they are welcoming a trusted potential tenant. To be able to do this, landlords make use of a commercial rental form to gather the information needed from the prospective tenant. The landlord can then conduct a background check to verify the information stated in the form. Know more about this form by reading below. Read More
A commercial rental form is a form used by landlords to assess the potential tenant’s business’ background information. The landlord requires the potential tenant to disclose their rental history, bank and credit references, and their current monthly revenue. Only then, when the landlord is satisfied with the records of the tenant, they can approve the application of the potential tenant. This commercial rental form consists of the landlord’s details (landlord’s name, property address, and square footage), applicant’s information, commercial rental history, bank references, credit references, and a clause asking for the potential tenant’s consent. This consent refers to access to the personal information provided by the tenant.
How to Create a Commercial Rental Form?
Commercial real estate is one of the lucrative businesses that you can invest in. According to Sun Dream Group, there are different things to consider that could guarantee you higher returns in the long run. These are location, diversifications, lease structure, quality, security deposit, quality of tenant, base-out rents or fit-out rents, demand vs. supply, and interior fit-outs.
Here are tips to get you started on making your commercial rental form:
1. Provide the Landlord’s and the Property’s Information
This area of the form will be completed by you and shall consist of your name, date, property’s name, and location, along with the square footage. The property’s address should be complete with the street address, city, state, and zip code. Provide ample spacing for each.
2. Ask for Applicant Information
This section will provide information about the potential tenant. It should also have information regarding the business. The business information should include the name of the company, address, contact information, type of entity, federal tax identification number, and business type. Some rental forms may consist of more fields. The legal names and addresses should be used here. Provide also ample spacing for each.
3. Include Commercial Renting History
The potential tenant’s renting history will be used to conduct background checks on the potential tenant. You will be assessing the behavior of the prospective tenant in their previous tenancy—so, ask for their former tenant’s full name, contact information, and address. For transparency purposes, demand the monthly rent amount, the period in which they rented the property, and their reasons for leaving. Provide at least two sections that trace back to their two previous tenancies.
4. Demand for Financial Background
The financial background includes its bank and credit references, as well as their current monthly revenue. This will help you determine their credit score and their ability to sustain their monthly payments. The financial background will help your landlord understand how much you are earning less of your costs. This section contains confidential information and should be treated as such.
5. Include a Consent Clause
Since the form consists of confidential information, you should include a consent clause at the bottom of the said form. You must ask consent to access the personal information disclosed herein by the potential tenant. Once they have read, understood, and consented, they may sign the form and include the date when it is signed.
Frequently Asked Questions
What do you mean by commercial rent?
Commercial renting refers to a property rented by tenants for commercial purposes. Simply speaking, the property is used by business owners to sell their products. What makes it different from the residential lease is their terms and conditions surrounding the commercial use.
Is a commercial rental from considered a commercial rental agreement?
No. A commercial rental form is what potential tenants fill out before renting the property. Whereas a commercial rental agreement is what comes after your application has been approved. The landlord has to conduct background checks through the rental form you provided for you to get approved.
What are the types of commercial property?
According to VTS, the different types of commercial property are industrial (bulk warehouse, heavy manufacturing, flex industrial, light assembly), hotels, offices (urban or suburban), multifamily (garden-style, manufactured housing community, mid-rise, special-purpose housing, walk-up, and high-rise), retail, and special purposes (self-storage, amusement parks, etc.)
What are the aspects that landlords look for before accepting a potential tenant?
The most common aspects that landlords look for in a potential tenant are credit reports, references, and tax returns. Sometimes, the landlord may also consider how you connect with them. While talking to the potential landlord, you should also maintain a pleasing personality.
What should my commercial rental form include?
Your commercial rental form should include the details about your property, the applicant’s and the business’ information, rental history, financial background, and a consent clause to access their personal information. Once these are provided, the potential tenant may sign the document with a date.
We have seen our favorite retail stores in malls or in alongside the streets whenever we wander the city at night. Most of us, if not all, have assumed that these same businesses owned the place they are occupying. But the truth is that many are renting because they are either saving up or finding the construction too expensive at the moment. And the only practical solution for them is to rent a commercial space. On the day of renting, the landlords provide them a commercial rental form to get to know them better. These will help them weigh whether or not these potential tenants are worthy of being approved.