Key Clauses that Should Be Included in Commercial Lease Agreements

Having a well-drafted commercial lease is essential regardless of whether you are leasing office space or an entire commercial property. Missing or vague clauses, like in any type of contract can lead to costly legal disputes and potentially further pain depending on potential litigation outcomes. Your commercial lease contain the following clauses in addition to others:

Parties and Leased Premises Clause

A lease should clearly define who is the landlord and who is the tenant. The exact location and boundaries of the space leased to the tenant should be clearly defined. Be sure to use appropriate company entities and have lease agreement signed by tenant company officials who have the legal authority to bind tenant company officials. There are also often tenant personal guarantors to commercial leases. These individuals should also be clearly defined.

Rent and Additional Expenses Clause

Clear terms should be included including the amount of base rent, Triple Net (NNN) costs: property taxes, insurance and maintenance. Also be sure to include any desired rent escalation terms such as a fixed annual increase, or percentages of tenant revenue, etc. This is very important because commercial tenants often make the assumption that rent is just base rent, to later discover that they’re responsible for significant additional cost. Ambiguity in your lease can be detrimental.

Insurance and Indemnification Clause

Specifically state the required types of insurance, such as general liability, property insurance, minimum policy coverage and landlord indemnification under the policies.

Security Deposit Clause

The bank name and location where the security deposit will be held in escrow should be included along with the security deposit amount and when amounts can be held from the deposit such as for damages and unpaid rent or other unpaid lease obligations.

Permitted and Forbidden Premises Use Clause

These clauses should clearly state what the leased property can be used for by the tenant. These clauses should also include information on prohibited uses, noise, hazardous materials, signage, use of common areas, parking, etc. These clauses in addition to laying out ground rules, also provide the ability to limit liability and prevent or mitigate landlord damage from conflicts created by tenants with things such as zoning laws, office condominium association rules, or neighboring tenants.

Assignment and Subletting Clause

Clearly define whether tenants can do things such as assign their lease to other parties, where new tenants can take over their lease obligations or whether tenants can sublease part or all of their space, where they can have a replacement occupant that is obligated to the tenant, but the tenant remains obligated for the lease obligations. The best practice is to require any lease modifications to be in writings signed by both the landlord and the tenant. Additionally, its recommended to require landlord approval of any potential assignments of subletting.

Maintenance and Repair Clause

Clearly define which party, (tenant or landlord) is responsible for maintenance items, such as structural repairs, repairs to windows, HVAC, electrical systems, plumbing, routine maintenance. Disputes frequently arise without clarity, especially in older properties.

Alterations and Improvements Clause

Clearly specify what changes if any a tenant can make to the leased premises. Specify how procedures such as permitting and approval processes are supposed to take place under the lease and who owns the improvements after the lease terminates. This clause prevents disputes over construction, removal of fixtures and zoning violations among other potential issues.

Renewal and Termination Clause

Clearly state the original lease term, clear options for renewals and extensions, notice requirements for termination or renewal. You may also want to include potential grounds for early termination by either party.

Default and Remedies Clause

Clearly state grounds that constitute a breach of lease and what remedies are available to the landlord in the event of tenant breaches such as cure periods, late rent penalties and rights to eviction, damages, possession and lien enforcement. Help a judge help you in the event that you need to take legal action for breaches of your lease agreement.

Pro Tip

Whether you are a potential landlord or tenant, always have a commercial lease reviewed by a real estate attorney before signing. Remember, a commercial lease isn’t just paperwork—it’s a legal contract with serious implications and impact on your property, business and bottom line.

Are you interested in getting a lease review, having a lease drafted or need help handling another real estate legal matter such as an eviction?  We’re here to help. Quick turnarounds and no surprises.

Contact Biazzo Law today at (703) 297-5777 or alyssa@biazzolaw.com to schedule a consultation today. www.biazzolaw.com 

** Information in this blog should not be considered legal advice, nor does it form an attorney-client relationship

eviction lawyer near me, eviction lawyer Charlotte, eviction lawyer Miami, eviction lawyer fort lauderdale, eviction lawyer, west palm beach, eviction attorney Charlotte, eviction attorney Miami, eviction attorney Fort Lauderdale, eviction attorney west palm beach, eviction attorney naples, eviction lawyer naples, landlord eviction attorney, landlord eviction lawyer, emergency eviction lawyer, emergency eviction attorney, evict a tenant lawyer, landlord rights lawyer, lawyer for landlord eviction, unlawful detainer lawyer, unlawful detainer attorney, eviction process lawyer for landlords, eviction process attorney for landlords, how to evict a tenant legally, can a landlord evict without notice? cost to evict a tenant, affordable business lawyer, affordable business attorney, commercial lease attorney, commercial lease lawyer, commercial lease agreement lawyer, commercial lease agreement attorney, lawyer for commercial lease, attorney for commercial lease, commercial real estate lease attorney, commercial real estate attorney, commercial lease contract attorney, commercial lease contract lawyer, commercial lease negotiation lawyer, commercial lease negotiation attorney, review commercial lease agreement, draft commercial lease agreement, negotiable commercial lease terms, lease agreement dispute attorney, lease agreement dispute lawyer, landlord lease attorney, landlord lease lawyer, attorney for small business lease, lawyer for small business lease, lease agreement lawyer for startups, lease agreement attorney for startups, business lease lawyer, business lease attorney, retail lease attorney, retail lease lawyer, office lease lawyer, office lease attorney, office lease agreement lawyer, office lease agreement attorney, commercial lease attorney charlotte, commercial lease attorney raleigh, commercial lease attorney Miami, commercial lease lawyer Miami, Charlotte commercial real estate attorney, Charlotte commercial real estate lawyer, Miami commercial real estate lawyer, Miami commercial real estate attorney, lease agreement lawyer near me, lease agreement attorney near me, residential landlord lease attorney, residental landlord lease lawyer, do I need a lawyer for a commercial lease? do I need an attorney for a commercial lease? how to review a commercial lease, how to review a commericial lease with a lawyer, how to review a commercial lease with an attorney, common commercial lease pitfalls, attorney tips for commercial tenants, attorney tips for commercial landlords, lawyer tips for commercial landlords, lawyer tips for commercial tenants, how to break a commercial lease legally, commercial lease eviction,  Do I need a lawyer to buy a house? Legal steps to buying a home, who handles closing documents? What does a real estate attorney do at closiong, what documents does a lawyer review in real estate, do I need a lawyer to sell my house? legal issues in buying property, can a real estate lawyer fix title issues, what if there's a problem with the title, legal help for property disputes, how to resolve boundary disputes, what happens if a seller backs out of a feal? who resolves real estate contract disputes? Can a lawyer review a lease agreement? what should be in a commercial lease? tenant rights vs landlord rights, how to get out of a lease legally, do I need a lawyer to evict a tenant? What is involved in a commercial property purchase, legal checklist for buying commercial real estate, who handles zoning issues? commercial lease negotiation legal tips, real estate due diligence legal steps, can a lawyer help me with real estate? what happens at a real estate closing? Is it worth hirng a real estate attorney? Do I need a lawyer for a for-sale-by-owner deal? Can I use a lawyer instead of a realtor? charlotte property dispute attorney, eviction lawyer charlotte nc, real estate litigation attorney charlotte, property line dispute lawyer charlotte, breach of real estate contract attorney charlotte, zoning and land use attorney charlotte, real estate lawyer ballantyne charlotte, attorney for real estate in south charlotte, real estate lawyer university city charlotte, property lawyer dilworth charlotte nc, do I need a real estate attorney in north carolina, how much does a real estate attorney cost in charlotte, who handles real estate legal matters in charlotte nc, charlotte nc real estate laws, when to hire a real estate lawyer in north carolina, miami real estate attorney, real estate lawyer miami fl, real estate attorney miami florida, property lawyer miami, real estate law firm miami, real estate attorney miami, real estate contract lawyer miami, residential real estate lawyer miami, commercial real estate attorney miami, real estate litigation lawyer miami, breach of real estate contract attorney miami, property dispute lawyer miami fl, quiet title attorney miami, landlord tenant attorney miami, eviction lawyer miami fl, real estate attorney brickell miami, property lawyer coral gables, closing attorney wynwood miami, real estate lawyer miami beach, downtown miami real estate attorney, real estate attorney little havana, do i need a real estate lawyer in florida, what does a real estate attorney do in miami, cost of real estate lawyer miami,