Commercial Lease Forms and Agreements

Commercial Lease Forms - What You Need to Know

Setting up one's own commercial office is a dream of every small business entrepreneur. If you can't afford to buy a commercial office, you may have the option to start your business in an office for lease housed in leased apartment buildings. A rental office / office space lease is available in all commercial areas of your city. While choosing the right form of commercial leasing space to lease for your business, you have to be careful about the location of the space and the nature of agreement.

Commercial real estate business is highly profitable, and these days the business of commercial real estate online is growing in popularity. Today, properties of all kinds, residential or commercial for sale, for sale commercial establishments, information on office space for lease and office space for sale, and commercial lease availability are all accessible online. Real commercial sale and lease samples are also available online. You can search online for buildings for sale and commercial real estate offices for lease.

A person planning to take an office space lease for conducting retail sale, or taking a warehouse for rent, should be well aware of the local zoning rules and regulations governing commercial lease/commercial properties for sale. When you take an office for lease for your business, bear in mind that these rules vary by local area.

What is a Commercial Lease?

A real estate commercial lease is an agreement for use of a space for business purposes in return for an amount agreed to be payable as rent. The person who owns the property for rent is called a lessor and the person who leases the property is called a lessee. Commercial real estate leasing is popular mostly among those running small businesses. Millions of retail business owners and professionals conduct their business on commercially leased premises/buildings for rent.

For leasing commercial real estate, the parties have to enter into an agreement. A real estate commercial lease agreement will contain details of properties for rent such as their addresses and boundaries. A commercial rental lease agreement will contain clauses stating how much money a business property will cost every year and also the terms, including the start date and end date. It will also contain any other conditions associated with a commercial property for lease/commercial for rent such as a landlord's right to enter the property, and/or use of pets or parking space. There is no prescribed form for preparing commercial lease agreements because the content may vary according to a lessee's needs. When parties sign a business rental agreement, it becomes binding and enforceable.

Generally, there are two types of commercial leases: net lease and gross lease:

• Net lease is when tenants pay an extra amount in addition to office rent as part payment of the commercial lease properties' expenses such as maintenance, taxes, insurance, and utilities. A commercial net lease is again of three types: single net lease, double net lease and triple net lease. A single net lessee pays rent as well as property taxes. Although this is the same in the case of double net lease, expenses incurred for common area maintenance and structural repairs of the space for lease in this case, shall be paid by the landlord or lessor. In a triple net lease, a lessee pays the commercial real estate taxes, building insurance, and apartment maintenance apart from any normal fees expected under the agreement. A lessee will also be responsible for paying costs in maintaining any common area in the commercial lease space.
• A commercial gross lease is a lease in which a lessee pays only rent and the landlord pays property taxes, insurance and maintenance charges. Gross lease agreements can be modified to suit a tenant's multiple needs. This type of lease, commonly known as modified gross lease, is often used for multi-tenant commercial lease property and industrial properties such as a commercial center/shopping center or a mall. A lessor pays expenses out of the fixed rents collected from lessees. A rental agreement may contain a lease clause that specifies what kind of lease it is.

Security Deposits and Rent

When it comes to leasing commercial office real estate, a majority of land owners will demand a sum of money as move-in money, also known as a security deposit. A lessee is entitled to get back the office lease deposit money, less charges for damages beyond reasonable wear and tear, or unpaid rent if any. The amount secured as deposit and the terms of repayment should also be mentioned in the commercial lease agreement.

Parties may agree to pay a certain amount of money as rent for a commercial property lease. The rent amount may vary according to facilities of the site and its location. By the end of the lease term, a lessee can renew the rental term after obtaining a written notice from the owner of the commercial space. The lessee can sublet a commercial space only with the permission of the lessor and according to the clauses laid down in the commercial lease agreement.