Commercial lease agreement

What is a Commercial Lease Agreement?

A commercial lease agreement is a legal contract between a landlord and a business tenant. This agreement allows a business to rent commercial property from a landlord or property manager. It outlines the rights and responsibilities of both parties, including the type of business that can operate on the property, rent amount, duration of the lease, potential rent increases, and whether the tenant can sublease the property. It also specifies the condition in which the property must be returned at the end of the lease.

Difference between Commercial and Residential Leases

Commercial lease agreements differ significantly from residential leases. They are typically longer and more complex, often tailored to the tenant’s business needs. Commercial leases do not have the same consumer protection laws as residential leases, making it crucial for businesses to understand their lease agreements thoroughly.

Types of Commercial Leases

There are several types of commercial lease agreements, including net leases, gross leases, and modified gross leases. The type of lease determines who pays for property expenses like insurance, property taxes, and maintenance. In a net lease, the tenant typically covers these costs. In a gross lease, the landlord pays for them, and in a modified gross lease, the costs are split between the landlord and tenant.