Learn more about commercial lease agreements and see what types are available. We discuss the legal considerations and standard terms of these contracts.
Owners and landlords use commercial lease agreements to lease their property for business purposes. The property they rent can range from vehicles and real estate to undeveloped land and equipment. This document will define the agreement terms between the owner and the Lessee. It details how the Lessee can use the property and what they pay for it.
There are multiple types of commercial leases, and which you use depends on the property you’re leasing and the purpose of the lease.
A lease-to-own agreement is one where the owner leases property to the Lessee, with built-in clauses that allow the Lessee to buy the property.
Commercial Lease Agreement Template
Used 5,282 times
This is your standard commercial lease agreement template, with all the important legal clauses you need. All you have to do is drag-and-drop your PandaDoc contacts and send them to sign.
Use it when a construction company leases construction equipment to another party or in any similar situation.
Equipment Rental Agreement
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This equipment rental agreement template is an easy way for your equipment rental business to automate contracting.
A land lease can be for undeveloped land or land with development. Usually, you’re leasing undeveloped land, allowing the Lessee more rights in developing that land at their own cost.
Land Lease Agreement Template
Used 4,887 times
You can construct a written Land Lease Agreement Template between a lessor landlord and a lessee tenant using a land lease agreement template. In return for regular rental payments, the landlord gives the lessee permission to use the property for a predetermined time.
This contract leases a truck or any vehicle to another party for business purposes. You use this document to approve the Lessee’s right to use the truck for businesses and how they’ll compensate you.
Car Lease Agreement Template
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Your customers can decide to lease a car from anywhere and you want them to sign it from anywhere. Use this car lease agreement template to let them.
This leasing agreement is one where you rent a specific space or building to another party. However, you only use it if the party plans to use the premises for business purposes.
Parking Space Lease Agreement
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A parking Space Lease Agreement for the rental of a parking space is made between the landlord and the tenant who wants to rent the area so that it can be rented by another person or business.
States have different legal requirements and clauses you must add. For example, the Uniform Commercial Code: Negotiable Instruments covers commercial leases in Florida. Using our state-specific templates, you can create a comprehensive commercial lease agreement between you and the other party.
PandaDoc creates the ideal templates for you, from the standard one you can customize to fit any situation to the state-specific ones. Find free templates that suit every possible situation. Further, you can customize all the templates to reflect your brand and policies.
Our step-by-step guide on customizing templates will ensure they fit any specific project requirements:
Some of the critical clauses included in your commercial lease agreement are the following:
While states can have specific legal considerations, some are universal. While some specifics might differ, the terms below are always critical in a commercial lease agreement.
Generally, this term only applies if you lease real estate or vehicles to customers. Some equipment, especially heavy machinery, might also fall under it. This clause will discuss what improvements or alterations the tenant can make to the property.
Overall, you want to ensure that if the Lessee alters or makes improvements to your property, that:
This section in commercial lease agreements is critical as it defines what you’re responsible for and what the tenant is responsible for during the contract. If the tenant’s negligence or malicious actions cause damage or property loss, you want to ensure they’re responsible for the repairs or replacement costs. However, the state requirements on this can vary, so always ensure you know the legal considerations of your state.
Some of the responsibilities you should clearly define are the following:
Assignment is when one of the parties assigns another party to take over the lease from them. It often happens if the owner sells the property during the lease’s term. However, terms are always involved, such as that the owner must notify the Lessee in writing should they assign the lease to another.
Subletting is when the Lessee leases the property to another party. With subletting, the Lessee must ensure that their Lessee follows the terms and conditions of the original agreement. As such, the Master Lease is often part of the Sublease, generally as an appendix.
As this leasing agreement is for commercial purposes, owners might be more likely to allow subletting for business purposes. However, as an owner, ensure:
A business often wants to establish itself in a specific area, so there’s a good chance the lease will be active for more than three years, though it depends on what you and the tenant are after. As such, ensure that explicit renewal and termination terms are in place to help smooth any lease changes.
For termination clauses, ensure you clearly define the notice period and termination method. As the owner, you want an adequate warning if the Lessee intends to terminate the lease to find another. Set in place a process that happens when the lease is terminated. This process must contain information such as the notice period, when the Lessee relinquishes control of the property back to you, and the return of any security deposit.
There aren’t many federal laws surrounding commercial lease agreements, as most of it is left up to the states. However, there are two you should consider:
As an owner, if you’re renting real estate to a tenant who plans on using it for public accommodations, like a restaurant, hotel, retail store, etc., you must be aware of this. If the premises don’t comply with that law, the tenant must be able to improve or alter it to fit, and sometimes it might be your responsibility if you don’t clearly define that it’s the Lessee’s.
That’s why you must add a clause that the tenant must dispose of all waste following federal, state, and local laws. If they don’t, you’ve done your due diligence, and all responsibility for the oversight rests solely on the Lessee’s shoulders.
