A commercial lease agreement is one of the most important contracts a business owner will ever sign. For franchise owners leasing a 1,000 to 10,000 square foot retail or office space in a strip mall, the details in your lease can shape your business’s future for years to come. At Baker Law Group, PLLC, we help business owners understand what should be included in a commercial lease agreement, draft strong contracts, and avoid costly mistakes.
Why a Commercial Lease Agreement Matters
A commercial lease agreement is more than just a document-it sets the rules for how you use, pay for, and maintain your business space. Unlike residential leases, commercial leases are highly negotiable and must fit the needs of both the landlord and the tenant. If you’re opening a new location or expanding your business, knowing how to write a commercial lease agreement that protects your interests is crucial.
A poorly written lease can lead to unexpected costs, disputes with your landlord, or limits on your ability to grow. That’s why business owners need to know what commercial lease agreement compliance and what terms are essential before they sign.
What Should Be Included in a Commercial Lease Agreement?
Every example of commercial lease agreement should address several key areas to protect both parties and provide clarity:
Parties and Premises:
The lease must name the landlord and tenant, specify the business entity, and describe the exact address and square footage of the leased space. This section should also clarify what areas are included, such as restrooms, storage, or parking.
Lease Term and Renewal:
The lease should state the start and end dates, renewal options, and the process for extending the agreement. Many business owners want the flexibility to renew or exit the lease as their needs change.
Rent and Payment Terms:
The agreement must spell out the base rent, payment schedule, and any additional charges, such as common area maintenance (CAM) fees, property taxes, or insurance. It should also explain how and when rent increases will occur.
Security Deposit:
The lease should state the amount of the security deposit, how it will be held, and the conditions for its return at the end of the lease.
Use of Premises and Restrictions:
This section defines what type of business can operate in the space and any limits on activities. Some leases include exclusivity clauses to prevent competitors from opening nearby.
Maintenance and Repairs:
The lease should outline who is responsible for routine maintenance, repairs, and improvements. For example, tenants may handle interior repairs, while landlords cover structural and common area maintenance.
Improvements and Alterations:
If you plan to renovate or improve the space, your lease should explain who pays for the work, who owns the improvements, and whether you must restore the premises when the lease ends.
Assignment and Subleasing:
A strong lease includes terms for transferring the lease to another business or subleasing the space. This flexibility can help you adapt if your business needs change.
Insurance and Liability:
The agreement should specify what insurance is required for both parties and who is responsible for damages or injuries on the property.
Default and Remedies:
This section explains what happens if either party fails to meet their obligations. It should detail notice requirements, grace periods, and the landlord’s remedies for non-payment or breach.
How to Write a Commercial Lease Agreement That Works
Knowing how to write a commercial lease agreement starts with understanding your business’s needs and the local laws. For example, many states have statutes that affect commercial leases, such as requirements for notice or limits on security deposits.
A well-written lease uses clear language and avoids legal jargon. It should address all the essential terms listed above and be reviewed by a legal professional who understands what commercial lease agreement compliance is in your state.
Real-World Problems from Poorly Drafted Leases
Business owners sometimes sign leases with vague terms or missing clauses. This can lead to disputes over who pays for repairs, surprise rent hikes, or even eviction. For example, if your lease doesn’t cap CAM fees, you could face unexpected charges each year. If you don’t have the right to sublease, you might be stuck paying rent for a location you can’t use.
Baker Law Group, PLLC often reviews commercial lease agreement documents and finds gaps that could cost business owners thousands of dollars. Our team helps you avoid these pitfalls by ensuring your lease is complete and enforceable.
Why Professional Lease Reviews Matter
Even if you use an example of commercial lease agreement or a template, every business is unique. Local laws, market conditions, and your specific needs all affect what should be included in a commercial lease agreement. A professional review helps you avoid costly mistakes, negotiate better terms, and protect your investment.
Most commercial lease reviews and drafting services cost about $2,000 to $3,000. This investment can save you far more by preventing disputes and giving you peace of mind.
Work with Baker Law Group, PLLC for Your Commercial Lease Agreement
A strong commercial lease agreement lawyer is your best protection as a business owner. Baker Law Group, PLLC brings experience, responsiveness, and a focus on results. We help you draft, review, and negotiate leases that support your business goals and minimize risk.
Contact Baker Law Group, PLLC today to review your commercial lease agreement, get answers to your questions, and secure your next location with confidence.
