How much does an office space lease agreement cost? Commercial property owners who have office space for rent may ask this question. Let’s explore this question and review general information about office space lease agreements and why they are important.
How Much Does an Office Space Lease Agreement Cost?
It is rare for a new business owner to purchase an office building – especially if their company is just starting. This makes office space lease agreements common in commercial real estate.
A property owner and a tenant can execute several types of office space lease agreements. Each lease lays out the various roles and responsibilities of each party. Office space leases can be complicated, so it is highly recommended that a property owner hires a real estate attorney to draft their contract.
An experienced attorney will know what clauses and information must be included in the office space lease agreement to ensure that it protects both parties and is legally enforceable.
Based on ContractsCounsel's marketplace data, the average cost of an office space lease agreement is $507.22.
What's Typically Included in an Office Space Lease Agreement
The details of every office space lease agreement will vary based on the party’s needs and the type of lease that is agreed upon.
Despite differences in details, the following key terms should be included in all office leases:
- Cost of rent. The office space lease agreement should detail the monthly rent rate so the tenant knows that they must pay the property owner each month. In addition, the lease should lay out what the rent covers, what expenses must be paid by the tenant (like utilities or insurance) and when the rent is due.
- Rent increases. It is common for commercial leases to increase rent throughout the duration of the rental agreement. This needs to be included in the agreement. Tenants will negotiate a rent cap.
- Security deposit. Property owners can include a security deposit agreement ; however, it must consist of the amount and how the tenant will get the deposit back pending inspection at the end of the lease.
- Duration of the Lease. The time of an office space lease can vary from a month-to-month lease to as long as a five-year term. This will vary depending on the needs of the property owner and tenant.
- Additional expenses. Depending on the type of lease, the parties will have to determine who is responsible for utilities, property taxes, property insurance, maintenance, repairs, and other services like snow removal or landscaping.
- Property description. An office space lease agreement should describe the rented property in detail. For example, some buildings may have additional office space rented to other tenants or shared areas like parking lots that are not covered under the lease agreement. A clear description of the property will allow the tenant to know which areas they can access.
- Use clause. Defines how a tenant can use the property for their business. This clause protects the property owner and their property from damage and liability.
- Exclusivity clause- If the office space is part of a larger building with offices rented out to other tenants, an exclusivity clause, or exclusivity agreement, prevents the property owner from renting space to the tenant's competition.
Types of Office Space Lease Agreements
The payment structure and the responsibility of each party are determined by the type of commercial office space lease that is agreed upon.
The most common types of office space leases include:
- Net lease. A net lease requires the tenant to pay property taxes in addition to the property's monthly rent.
- Double net lease. Under a double net lease, the tenant pays for property taxes, insurance, and monthly rent.
- Triple net lease. Under a triple net lease, the tenant pays for property taxes, insurance, regular maintenance, and rent.
- Percentage lease. Under a percentage lease, the tenant pays a base rent amount and a percentage of their business revenue.
- Gross lease. Under a gross lease, the tenant pays a monthly rent, and all utilities and all other services are included.
Examples of Office Space Lease Agreement Projects
Office Space Lease Agreement Drafting Services
A property owner needing an office space lease agreement should always contact a real estate lawyer for drafting services. A lawyer will draft the agreement and educate the property owner on their lease options and help them make the best decisions for their rental space.
An office space lease agreement is an important contract in commercial real estate and must be drafted correctly. If there are mistakes or missing information, the property owner or tenant could risk liability or legal disputes.
A knowledgeable real estate lawyer will know what clauses to include to ensure the office space lease is legally enforceable.
Office Space Lease Agreement Review Services
Both property owners and tenants may require contract review services. For example, many property owners attempt to draft their office lease agreement to save money on legal fees. While this is possible, they should always have a lawyer review the agreement to check for mistakes before it is used.
Tenants who are faced with signing an office lease are encouraged to hire their attorney to review the agreement. Office lease agreements are often long-term commitments that can affect a tenant’s business. Therefore, it is important that the lease is fair and includes all necessary protections for the tenant.
Office Space Lease Agreement Drafting Cost
Drafting an office space lease agreement can be complicated depending on the type of commercial lease the property owner chooses to use.
According to ContractsCounsel's marketplace data, the average office space lease agreement drafting costs are $600.00 across all states.
Office Space Lease Agreement Review Cost
If a property owner or tenant needs a lease reviewed before signing, they can hire an attorney for review services. However, document review requires a licensed attorney’s legal expertise, so the client must pay for these services.
ContractsCounsel's marketplace data shows that the average office space lease agreement review costs are $495.63 across all states.
How Do Lawyers Charge for an Office Space Lease Agreement?
Hourly Rates for Office Space Lease Agreements
Hourly rate fee structures are a common way for real estate lawyers to charge their clients for legal services. Under an hourly rate agreement, the lawyer will charge the client a set rate for each hour of work spent on a project.
The benefit of hourly rates is that the lawyer is compensated for all their work, and the client can make payments for legal services over a period of time rather than upfront.
The marketplace data for ContractsCounsel shows that the average hourly rate for a real estate lawyer ranges from $200 - $350 per hour.
Flat Fee Rates for Office Space Lease Agreements
Flat fee billing structures are frequently used for drafting projects like creating an office space lease agreement. In this fee structure, lawyers pay their clients a flat fee for legal services.
The benefit of a flat fee rate structure is that the client knows the total legal expenses before agreeing to hire the lawyer and the lawyer receives the entire payment for services upfront.
A client must ask the attorney what is covered in the flat rate. Sometimes extra meetings, communications, revisions, and negotiations could cost more.
ContractsCounsel's marketplace data shows that the average flat fee rate for an office space lease agreement is $507.22.
Get Help with an Office Space Lease Agreement
Do you need help with an office space lease agreement project? If so, post a project in ContractsCounsel's marketplace to receive flat fee bids from real estate 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.