Free Commercial Lease Agreement Template

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What Is a Commercial Lease Agreement

A Commercial Lease Agreement form is a legal contract that sets the terms and conditions for a landlord and tenant to rent out a space for business use. 

There are other names for a Commercial Lease Agreement, such as: 

  • Business Lease Agreement

  • Commercial Property Lease Agreement

  • Lease Agreement for Commercial Property

  • Office Lease Agreement

The legal document covers terms similar to a residential lease agreement, such as rent and maintenance

However, it also goes over how the tenant will pay common area maintenance, insurance as well as real estate taxes that are specific to commercial leases

Use our printable Commercial Lease Agreement template to create your mistake-free document in minutes. 

Types of Commercial Lease Agreements

There are a few types of Commercial Lease Agreements. Each type is related to the base rent and operating costs that the tenant has to pay. 

Familiarize yourself with the different types of Commercial Lease Agreements:

  • Net: In this type of agreement the tenant must pay property taxes and insurance, in addition to standard area maintenance since operating costs are not part of the rental rate. 

  • Modified Gross: Both you and the tenant agree on and share the operating costs. 

  • Percentage: The base rent and monthly percentage of gross income from the business that is located in the property are paid to the landlord.

  • Full Service: The rental rate covers all property operating expenses, such as utilities, maintenance, and real estate taxes. You may also insert provisions giving them the right to transfer any future hikes in operating expenses to the tenant.

Commercial Lease Clauses

When creating a simple Commercial Lease Agreement, it’s necessary to include certain clauses in the contract. Without these clauses, you risk your contract being considered invalid or illegal in certain circumstances.

The clauses include:

  • Americans with Disabilities Act (42 U.S. Code §12183): Commercial tenants that offer “public accommodation” or have a workforce of 15 or more are obligated by the Americans with Disabilities Act (ADA) to follow all handicap access guidelines. The only exception to this rule is for properties that were not constructed or renovated after 1992. 

  • Hazard Waste (42 U.S. Code § 6901): This clause obligates the tenant to add their signature stating that they will comply with all federal, state, and local regulations regarding the disposal of hazardous waste. 

Your commercial tenants are required to follow EPA and ADA compliance when operating a business. For that reason, they must be included in your contract.

Sample of a Commercial Lease Agreement

To understand what’s included in this legal document, we have included a sample Commercial Lease Agreement below. 

Review the example to know how to structure your contract correctly.

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Commercial Lease Agreement Template Sample

Commercial Lease Agreement by State

Each state has governing laws that set out requirements for creating and enforcing a Commercial Lease Agreement. 

Reference your state’s law in the table below.

State Governing Law
Alabama § 7-2A-101
Alaska N/A
Arizona §42-5069
Arkansas §18-17-912
California § 7191
Colorado § 4-2.5
Connecticut §830-47a-4b
Delaware §25-61
Florida §83.001
Georgia §11-2A-101
Hawaii §490:1-101
Idaho §28-12-303
Illinois §810-2A
Indiana §26-1-2.1
Iowa N/A
Kansas §84-1-101
Kentucky §1.010 — 3.275
Louisiana N/A
Maine §6017
Maryland §2A-101
Massachusetts §2A-511
Michigan §174-1962-2A
Minnesota §336.1-102
Mississippi §75-2A-101
Missouri §400.2A-101
Montana §30-2A-101
Nebraska §2A-102
Nevada §118C.010
New Hampshire §382-A:1-203
New Jersey §12A:1-203
New Mexico §55-1-101
New York §2-A-101
North Carolina § 25-2A-101
North Dakota §41-02.1-01
Ohio §1310.01
Oklahoma §12A-1-9-101
Oregon §72A.1010
Pennsylvania §13-1101
Rhode Island §6A-1-101
South Carolina §36-1-101
South Dakota §57A-2A-101
Tennessee §47-2A-101
Texas §2A.101
Utah §70A-2A-101
Vermont §9A-2A-101
Virginia N/A
Washington D.C. §28:1-101
Washington §62A.2A-101
West Virginia §46-2A-101
Wisconsin §411.101
Wyoming §34.1-1-101

What Should Be Included in a Commercial Lease Agreement

To create a detailed agreement, it’s critical to have all the essential terms of a Commercial Lease Agreement in place. 

This includes information related to each party and the terms and responsibilities of the landlord and tenant.

The following details should be added to your Commercial Lease Agreement: 

  • The property’s details

  • The permitted use of the rental property 

  • The personal information of each party

  • The lease terms, such as the lease type, length, and start and end date

  • Whether the tenant can assign or sublease the property

  • The rent details, including the amount, payment frequency, and whether the tenant’s lease will be gross, net, or triple net

  • The responsibility for utilities and insurance payments

  • Security deposit information

  • Information regarding improvements to the property 

  • Maintenance responsibilities

  • Termination clauses

  • Additional fees or expenses

  • Insurance requirements for the property

  • Each party’s signature

By including all of this information you’ll have a secure and legally valid document

How to Write a Commercial Lease Agreement

As a landlord or even as a tenant looking to lease a commercial property, it's important to have a well-drafted Commercial Lease Agreement

This legally binding document must carefully set out the terms and conditions of the lease, outlining the rights and obligations of both parties. 

Here's a step-by-step guide on how to write a Commercial Lease Agreement:

  1. Identify the parties: Start by clearly identifying the parties involved in the lease agreement. This should include the landlord's name and address, as well as the tenant's name and address.

  2. Describe the property: Describe the commercial property being leased, including its address, square footage, and any other relevant details.

  3. Define the lease term: Include the start and end dates of the agreement. Be sure to also include any options for renewal or extension.

  4. Set the rent and security deposit: Outline the rent amount, how often it's due, and any late fees or penalties for non-payment. Also, specify the amount of the security deposit required and how it will be returned at the end of the lease.

  5. Include any additional fees: Ensure that any additional expenses are added, if there are any, such as property taxes or maintenance costs.

  6. Specify permitted uses: State the allowed uses for the commercial property, including any restrictions on use, such as zoning laws or noise regulations.

  7. Outline tenant improvements: If the tenant is allowed to make improvements to the property, be sure to outline the specific requirements and who will be responsible for the costs.

  8. Mention insurance requirements: Define the insurance obligations for the property, including liability and property insurance, and who is responsible for paying the premiums.

  9. Outline maintenance responsibilities: Clearly outline the maintenance responsibilities for both the landlord and tenant, including those responsible for repairs, upkeep, and cleaning.

  10. Include any termination clauses: Mention any termination clauses, including conditions for early termination or default, and what happens to the security deposit in these scenarios.

  11. Sign and date the agreement: Make sure to have both parties sign and date the Commercial Lease Agreement, and provide copies to each party.

Use our Commercial Lease Agreement template to guarantee that none of these steps are left out without having to pay excessive legal fees.

Other Real Estate Documents

Whether you are a tenant or a landlord it’s a great idea to know about other legal documents that you can use related to a lease. 

These similar documents are indispensable if you are a landlord:

You can find and easily download these documents for free on LawDistrict. 

Commercial Lease Agreement FAQs

To familiarize yourself a bit more with how a Commercial Lease Agreement works and what to include, we have responded to some of the most frequently asked questions regarding the document. 

Review the answers to the following frequently asked questions below for a better understanding of the legal document.

How to Terminate a Commercial Loan Agreement?

If a Commercial Loan Agreement needs to be ended the actions that must be taken will depend on the party that wishes to terminate the contract.

If you are a tenant that wants to know how to terminate a Commercial Lease Agreement early, the simple option is to make a “buy-out” deal with the landlord. 

It’s also important to review the terms of your contract before ending your lease.

What Happens if the Tenant Wants to Change the Commercial Lease Before the End of the Agreement?

If you would like to make any modifications to your Commercial Lease Agreement before the end date, you will need to make an amendment. By using a lease amendment you will be able to officially change some or all of the Commercial Lease Agreement.

Any changes must follow the governing law of your state, the same as the original agreement. 

What Part of a Commercial Lease Agreement Refers to How Many Employees May Work on the Premises?

The part of a commercial lease agreement that refers to how many employees may work on the premises is typically included in the “Property Use” or the “Permitted Use” section. 

This section outlines the specific activities the tenant is allowed to conduct on the leased property, including the number of employees they are allowed to have on-site. 

It may also specify any restrictions on the type of business activities allowed on the property. It is important for tenants to carefully review and understand the permitted use section of the lease agreement to avoid any violations and potential legal consequences.

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Commercial Lease Agreement Template Sample

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Preview of your Commercial Lease Agreement

THIS LEASE (this "Lease") is dated as of ______________________ (hereinafter, the "Effective Date")

_________ of _________
(the "Landlord")


_________ of _________
(the "Tenant")

IN CONSIDERATION received from the Landlord for leasing certain premises to the Tenant, and the mutual benefits and obligations outlined in this Lease, the Parties to this agreement (referred to as the "Parties") hereby agree to the following terms:
Intent of Lease

1. The Parties to this Lease mutually agree that the rent for this Lease will be based on a gross rent structure, wherein the Tenant will be responsible for paying the Base Rent and any Additional Rent, while the Landlord will bear the responsibility for all other service charges associated with the Premises and the operation of the Building, unless otherwise specified in this Lease.
Leased Premises
2. The Landlord agrees to lease to the Tenant the office area referred by the municipality as _________, _________ (the "Premises"), and which encompasses a Leasable Area of _________ square feet.

3. The Premises shall be utilized solely for the following permitted use:     ______________________________________________________________________
    __________________________________________________ (the "Permitted Use").
4. As long as the Tenant, or an assignee or subtenant approved by the Landlord, is using and occupying the Premises for the Permitted Use and is not in default under the Lease, the Landlord agrees not to lease any space in the Building to any tenant whose primary business involves the provision of the following services:     ______________________________________________________________________
5. The lease term shall start on _________ at 12:00 noon and shall terminate on _________ at 12:00 noon (the 'Term').
6. The Landlord has the right to terminate the tenancy under this Lease by giving the right number of days notice as required by the law of the if the Tenant fails to observe, perform, and keep any of the covenants, agreements, stipulations, obligations, conditions, or other provisions of this Lease. However, if the Tenant persists in such default beyond the stipulated number of days' notice, the Landlord may terminate the tenancy without further notice.
7. The Tenant shall pay the Base Rent of $_________, payable per month, for the Premises (the "Base Rent"), without any deduction, abatement, or setoff, subject to the terms of this Lease. The Tenant shall also be responsible for any taxes or fees related to its business.
8. The Tenant will pay the Base Rent on or before the 1st of each and every month of the Term to the Landlord.
9. The landlord retains the right to collect the full amount owed, even if they accept a partial payment from the tenant.
Use and Occupation
10. The Tenant is obligated to fully equip, furnish, staff, and open the entire Premises for public business on the agreed-upon start date of the lease and continuously use and occupy the entire Premises for its business operations throughout the lease term. The Tenant is required to operate its business in a reputable manner on the days and during the hours of business specified by the Landlord.
11. The Tenant agrees to comply with all applicable laws, regulations, and rules set forth by any governmental or regulatory body, whether federal, state, municipal, or otherwise, in relation to the operation of its business on the Premises. The Tenant further agrees not to engage in any activity on or in the Premises that violates any of these laws or regulations.

12. The Tenant agrees to operate and conduct its business on the Premises in compliance with all applicable statutes, including any subordinate legislation currently in force or that may come into force in the future, and any regulations, rules, or orders issued by any government department, local authority, public or competent authority, or court of competent jurisdiction. The Tenant also agrees to comply with any requirements of the insurers relating to the use, occupancy, and enjoyment of the Building, including adhering to proper health and safety practices recommended by all appropriate authorities.
Quiet Enjoyment

13. The Landlord promises that as long as the Tenant fulfills their obligations under this Lease, such as paying rent and complying with the terms of the lease, the Tenant will be able to use and enjoy the Premises without any interference or disturbance from the Landlord.
14. If the Tenant remains in the Premises after the lease term has ended or the lease has been terminated, without written consent from the Landlord, the Tenant will become a month-to-month tenant. The Tenant will be required to pay a monthly rental amount that is at least twice the Base Rent, and all other provisions of the original Lease will still apply to the new month-to-month tenancy. It should be noted that a tenancy from year to year will not be automatically created by law in this situation.
Additional Rights on Reentry

15. If the Landlord reenters the Premises or terminates this Lease, then:

    a. Even if the lease is terminated and the term becomes forfeited and void, the provisions of the lease that describe the consequences of termination will still apply;
    b. The Landlord has the right to relet the Premises or a portion of the Premises for a term that may be shorter or longer than the remaining Term, and may offer reasonable concessions as part of the reletting process, which may include alterations or improvements to the Premises;

    c. After reentry, the Landlord may appoint a receiver to collect rents and profits from the Tenant's business. If necessary, the receiver may take possession of the Tenant's personal property used in the business, such as inventory, trade fixtures, and furnishings, and use them without compensating the Tenant;

    d. After reentry, the Landlord may terminate the Lease by providing written notice of termination to the Tenant within 5 days. Failure to provide such notice will not result in the automatic termination of the Lease upon reentry by the Landlord or its agents.;

    e. The Tenant will pay the Landlord on demand:
         i. all rent, additional rent, and any other amounts owed under the Lease up to the time of reentry or termination, whichever occurs later;
         ii. reasonable expenses incurred or to be incurred by the Landlord in connection with the reentry, termination, reletting, collection of amounts due or payable by the Tenant, seizure, and sale of assets, and any other actions taken by the Landlord as a result of the Tenant's default under this Lease. These expenses shall include but are not limited to, brokerage fees and expenses, legal fees and disbursements, and the expenses of keeping the Premises in good order, repairing them, and preparing them for reletting; and
         iii. as liquidated damages, an amount equivalent to the expected loss of rent and other income that the Landlord would have received from the unexpired portion of the Term, if the Lease had not been terminated. The Landlord may opt to receive this amount either:
             I. an amount calculated by the Landlord, based on the present worth of all Base Rent and estimated Additional Rent that would have been payable during the unexpired portion of the Term, discounted at a _________% per annum interest rate. The Landlord may use reasonable estimates of when any such other amounts would have become payable and may make such other assumptions of the facts as may be reasonable in the circumstances; or
             II. an amount equal to the Base Rent and estimated Additional Rent for a period of six (6) months.
16. The Tenant is not responsible for obtaining insurance coverage for any damage or loss to the Landlord's contents and furnishings in or about the Premises. The Tenant assumes no liability for any such loss.
17. The Tenant is not responsible for obtaining insurance coverage for the Premises against damage or loss to the structure, mechanical or improvements to the Building, and the Tenant holds no liability for any such loss.
18. The Tenant is not responsible for obtaining liability insurance for the Premises and will not be held liable for any loss resulting from the lack of such insurance.

19. In the event that the Tenant abandons the Premises or any part thereof during the Term, the Landlord reserves the right, at its option, to enter the Premises without incurring any liability or penalty, and without being obligated to make any payment to the Tenant. The Landlord may also choose, as agent for the Tenant, to relet the Premises, or any part thereof, for the remainder of the Term, and to collect rent payable by virtue of such reletting. In such case, the Tenant may be held liable for any difference between the Rent payable under this Lease for the unexpired Term and the net rent received by the Landlord from the reletting. Any personal property left by the Tenant on the Premises following abandonment will be deemed abandoned by the Tenant, and the Landlord may dispose of such property as it sees fit, without incurring any liability.
Governing Law

20. The Parties to this Lease intend that the tenancy created by this Lease, as well as its performance and any legal proceedings arising from it, be governed exclusively by the laws of the , regardless of where any legal action or proceedings may be initiated.

21. The Parties to this Lease acknowledge that the applicable legislation of the (the 'Act') may take precedence over any provision of this Lease. In the event of a conflict between any provision of this Lease and the Act, the Act will prevail, and the provision of the Lease in conflict will be amended or deleted as necessary to comply with the Act. Furthermore, any provisions required by the Act will be incorporated into this Lease.
Assignment and Subletting
22. The Tenant is prohibited from assigning this Lease, subletting the Premises, or granting any concession or license to use any part of the Premises. Any such assignment, subletting, concession, or license, whether by operation of law or otherwise, will be considered void and may, at the option of the Landlord, result in the termination of this Lease.
Bulk Sale

23. Before conducting any bulk sale of goods and assets, the Tenant must obtain the Landlord's written consent. The Landlord may not unreasonably withhold their consent if the Tenant and the Purchaser can provide the Landlord with assurances, in a form satisfactory to the Landlord, that the Tenant's obligations under this Lease will continue to be performed and respected in a manner satisfactory to the Landlord after the completion of the bulk sale.
Care and Use of Premises
24. The Tenant is required to promptly inform the Landlord of any damage or situation that could significantly disrupt the normal use of the Premises.
25. The Tenant shall refrain from creating or permitting any noise or nuisance that would reasonably disrupt the comfort or convenience of other tenants, as determined by the Landlord.
26. The Tenant is prohibited from participating in any unlawful business or conduct in or around the Premises.

27. The Landlord and Tenant are obligated to adhere to all laws and regulations pertaining to health, sanitation, fire safety, housing, and general safety standards.
Surrender of Premises

28. The Tenant shall vacate and return the Premises to the Landlord at the expiration of the lease term in the same good state and condition as they were at the start of this Lease, except for reasonable wear and tear and damages caused by natural elements.
Hazardous Materials

29. The Tenant is prohibited from keeping or storing any items or materials on the Premises that are hazardous, flammable, explosive, or may significantly increase the risk of fire on the Premises or that may be deemed hazardous by any reputable insurance company. However, if it is necessary for the proper functioning of the business, the tenant may store hazardous materials as long as the Tenant is responsible for adhering to all laws, regulations, and rules concerning dangerous, flammable, or explosive materials and environmental protection. The Tenant shall:

    a. Comply with any applicable laws, regulations, rules, or government authorities, with the Landlord's approval and at its own expense;

    b. Promptly notify the Landlord in writing of any discharge or release of such materials in or around the Premises;

    c. Repair any damage resulting from such discharge or release in or around the Premises, with the Landlord's approval; and

    d. At its own cost, obtain a report from an independent consultant verifying the removal or compliance with such materials if requested by the Landlord.
Rules and Regulations

30. The Tenant agrees to abide by all regulations and guidelines posted by the Landlord with regard to the use and maintenance of the Building, parking lot, and other communal facilities provided for the Tenant's use on the Premises.
General Provisions

31. The Landlord's waiver of any failure by the Tenant to perform or observe the provisions of this Lease will not act as a waiver of the Landlord's rights under this Lease with respect to any future defaults, breaches, or nonperformance. Such waiver will not impede or alter the Landlord's rights concerning any future defaults or breaches in any way.

32. This Lease will remain in effect and be legally binding on and beneficial to the respective heirs, executors, administrators, successors and assigns of each party to this Lease. All obligations and promises contained in this Lease shall be considered as fundamental terms of this Lease.

33. Any amounts due from the Tenant to the Landlord under this Lease will be considered as Additional Rent and can be collected by the Landlord as unpaid rent.

34. If there are multiple Tenants executing this Lease, all of them will be jointly and severally liable for each other's acts, omissions, and liabilities under this Lease.

35. Time is of the essence in this Lease.

36. This Lease represents the complete agreement between the Landlord and the Tenant. No previous understandings or representations of any kind made before the date of this Lease will be binding on either party except as incorporated into this Lease. Specifically, no implied warranties of the Landlord outside of this Lease will be considered
IN WITNESS WHEREOF This Lease has been executed by the Parties on this ________ day of ________________, ________, by affixing their signatures under hand and seal, or by a duly authorized officer under seal.
(Signature of Witness)______________________________
 _________ (Landlord)
(Print Name) 


(Signature of Witness)______________________________
 _________ (Tenant)
(Print Name) 


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