How Much Does a Commercial Lease Agreement Cost?
The average cost (i.e., legal fees) for a lawyer to draft a commercial lease agreement is $750 [1] on a flat fee basis. The average cost for a lawyer to review a commercial lease agreement is $730 [2] on a flat fee basis. These cost points come from recent projects on the ContractsCounsel platform and are averages from across all US states.
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What is a Commercial Lease Agreement?
A commercial lease agreement is a legally binding contract between a landlord and a business owner. The commercial lease agreement lays out the terms and conditions under which the business owner can rent a space in the landlord’s building to conduct business.
Renting a space rather than buying it is often advantageous to a business because they don’t need the capital required to purchase the property. In addition, renting a space in a building saves money. Depending on the type of lease, the business owner may not have to pay additional fees like maintenance and property taxes.
Commercial lease agreements differ from standard residential leases. For this reason, many landlords choose to hire an attorney to draft the document. A commercial lease needs to include essential information like:
- The type of commercial lease being executed
- Cost of rent and any additional fees or expenses
- Duration of the lease
- How to terminate the lease early
An experienced lawyer familiar with commercial lease agreements will know what needs to be included in the agreement to make it legally enforceable should any type of dispute arise.
See Commercial Lease Agreement Pricing by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
What’s Typically Included in a Commercial Lease Agreement?
Commercial lease agreements are typically more complicated than residential agreements and require additional lease terms. Although the terms will vary based on the landlord and the business, the following list includes common provisions in commercial lease agreements.
- Cost of rent. The cost of renting the property is one of the most important parts of the lease agreement. The agreement should include the cost of rent, due date, and payment method.
- Duration of the lease. Many leases are one-year agreements, but some commercial landlords require a minimum three-year commitment. This provision should also include information about renewal options.
- Deposits. Many leases require a security deposit and sometimes even first and last month’s rent. The commercial lease agreement should also address the return procedures of the deposit.
- Description of the property. A description should include the address, square footage, parking areas, and common areas.
- Business signs. It is common for commercial lease agreements to include a provision about the type of signage a business can display on the building. Some leases prohibit signs or limit the size and type.
- Improvements or repairs to the property. Depending on the type of commercial lease, the tenant may be responsible for making repairs to the property. This provision should lay out who is responsible for the payment of improvements or repairs.
- Use clause. In a commercial lease agreement, the use clause dictates how the property can be used and protects the property and landlord from damages and liability. A tenant may want to negotiate a broad usage clause to allow more freedom on the property.
Commercial lease agreements are highly customizable, so landlords and business owners can include any additional terms they think are necessary. It is important to ensure there are no vague or illegal terms in the agreement because they will not be enforceable.
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Types of Commercial Lease Agreements
As mentioned above, there are several types of commercial lease agreements. The various agreements vary based on who is responsible for paying additional expenses like taxes, maintenance, and utilities.
The six most common commercial lease agreements include:
- Net Lease. The tenant pays property taxes in addition to the monthly rent.
- Double Net Lease. On top of monthly rent, the tenant pays taxes and insurance.
- Triple Net Lease. The tenant pays for the taxes, insurance, and maintenance in addition to the rent.
- Absolute Triple Net Lease. In an absolute triple net lease, the landlord has no responsibility for paying taxes, insurance, or maintenance. Tenants are even responsible for extensive repairs to the building, like roof repairs.
- Percentage Lease. The tenant pays a base rent amount and a set percentage of their sales and profits.
- Fully Serviced Lease. Sometimes called a gross lease, the tenant pays just a monthly rent inclusive of all expenses, utilities, and other services.
A commercial lease agreement must clearly state which type of lease is being used, what expenses are the landlord’s responsibility, and what the tenant must cover.
Examples of Commercial Lease Agreement Projects
Commercial Lease Agreement Drafting Services
Many landlords hire a real estate lawyer to draft their commercial lease agreement. Landlords must be protected by their lease. Hence, it needs to include all necessary provisions and terms legally binding and enforceable.
A real estate lawyer will typically charge a client for an initial consultation and then for the time it takes to draft the commercial lease. Some lawyers will include revisions or additional meetings in the cost; however, some may charge additional fees for extra legal work.
Commercial Lease Agreement Review Services
Having a lawyer review a lease agreement can be invaluable for a tenant. Lease agreements are generally drafted by the landlord and tend to favor the landlord's interests more. Before signing a commercial lease agreement, the tenant should have their attorney go over the document to ensure it is fair and protects the tenant's interests.
Commercial Lease Agreement Templates
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How Much Does it Cost to Draft a Commercial Lease Agreement?
Hiring an attorney to draft a commercial lease agreement will cost the landlord. Still, it is usually well worth the expense. A lawyer will draft a professional, legally binding agreement that the landlord can use over and over.
ContractsCounsel’s marketplace data shows the average commercial lease agreement drafting costs $750 across all states and industries.
How Much Does it Cost to Review an Existing Commercial Lease Agreement?
Review services by an attorney will also come with fees. For example, suppose the tenant hires a lawyer to review the contract before signing. In that case, they will be fully responsible for paying the lawyer.
ContractsCounsel’s marketplace data shows the average commercial lease agreement review costs to be $730 across all states and industries.
How Do Lawyers Charge for a Commercial Lease Agreement?
Real estate attorneys can charge for their services in several ways. Hourly rates and flat fee rates are the two most common fee structures.
Hourly Rates for Commercial Lease Agreements
When using an hourly rate fee structure, the lawyer will bill the client for the number of hours spent working on a project at a set hourly rate. The lawyer must inform the client of the hourly rate. The parties should execute a written retainer agreement outlining all billing and payment terms and conditions.
Hourly rate agreements protect lawyers because they will be compensated for all time spent working on a case or project, even if it takes longer than expected.
ContractsCounsel’s marketplace data shows the average hourly rate for a real estate lawyer ranges from $225 - $300 per hour.
Flat Fee Rates for Commercial Lease Agreements
When a lawyer is hired for a specific project and has a precise end date, they may use a flat fee rate structure. The lawyer will provide the client with a comprehensive fee that includes all work for the project.
If the client agrees to the price, they will pay upfront and typically not worry about additional costs. However, it is wise to execute a fee agreement like an hourly rate schedule so the client knows what legal services the flat rate fee includes.
ContractsCounsel’s marketplace data shows the average flat fee rate for a commercial lease agreement is $730.
Get Help with a Commercial Lease Agreement
Do you need help with a commercial lease agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from business lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.
