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What is a Business Office Lease Agreement?
A business office lease agreement, also known as a commercial lease or office space lease, is a legally binding agreement that establishes the terms and conditions between a tenant (lessee) and landlord (lessor) for renting an office space. Some of the details this lease agreement will include are:
- Rent amount
- Lease length
- Maintenance and repairs
- Permissible use of space
- Modifications and improvements
- Subleasing rights
Tenants that are asked to sign business office lease agreements are typically business owners looking for office space to house their business and employees. Landlords are typically individuals or businesses that own office buildings that rent to tenants for the purpose of making rental income.
The terms of a business office space lease will vary from other types of commercial leases, like leases for retail space, since the rent amount is typically not tied to the performance of the business. It is common for office leases to have a term of five to ten years, but varies depending on the agreement.
Common Types of Leases Used for Business Offices
There are many different versions and flavors of lease agreements used for commercial real estate. Below are commonly used lease types for business office space:
- Net Lease. A net lease requires the tenant to pay a base rent amount, plus fees associated with maintenance, utilities, repairs, etc. There are different types of net leases, but a good way to think about them is that the tenant is responsible for base rent and costs associated with the day-to-day property.
- Gross Lease. A gross lease is simply when a tenant agrees to pay monthly base rent, and the landlord pays for everything else related to running the property.
Key Terms in a Business Office Lease Agreement
Business office lease agreements can vary based on their terms, but below are some common terms to know and understand:
Rent Amount and Rent Escalations
One of the most important terms in a business office lease is the amount the tenant will be paying in rent. This will be clearly outlined in the lease agreement. There may also be rent escalations included for future years.
Lease Term
The lease agreement will outline how long the length of the lease will be. It is common to see lease terms for office space at five to ten years.
Modifications to Property
Given office space is typically built out to support the business renting it, office leases will have language included that indicates what the tenant is allowed to do in terms of improving and modifying the property. It is important for the tenant to make sure this language aligns with the plans they have for the office space.
Maintenance, Repairs, and Utilities
There are typically month-to-month costs associated with running a property, which can be categorized as maintenance, repairs, and utilities. The lease will outline who is responsible for these costs.
Lease Termination
If a business files bankruptcy or there is a dispute between the landlord and the tenant, there may be a reason to terminate the lease. The lease will outline what qualifies as acceptable reasons to terminate the lease and the process by which the landlord or tenant can use to terminate the lease.
Subleasing
Some businesses may want to sublease part of an office space they have leased, given it can help supplement income to help pay for the rental. The business office lease agreement will outline if subleasing is permissible, and if so, anything the tenant will need to do or be responsible for.
Seeking Professional Advice
If you are needing to draft a business office lease agreement or have one reviewed, we recommend seeking professional legal advice. Given the size of the potential transaction (five to ten years of rent payments), you want to make sure your rights are protected and you’re setting yourself up for success. Hiring a commercial real estate lawyer to guide you through the process will help, since they are well versed in the lease terms you will need to know.
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Meet some of our Business Office Lease Agreement Lawyers
Alen A.
Alen Aydinian is a seasoned real estate attorney with a wealth of experience in handling transactional matters, real estate transactions, and lease agreements. As a licensed real estate broker, Alen Aydinian brings a unique perspective to the table, allowing clients to benefit from both legal expertise and practical industry knowledge. He is a trusted advisor in the realm of real estate transactions and lease agreements. Whether representing buyers, sellers, landlords, or tenants, Alen Aydinian is committed to providing strategic counsel and dedicated advocacy every step of the way. Clients rely on him for sound legal guidance, proactive problem-solving, and unwavering support throughout the transaction process.
Paul S.
I focus my practice on startups and small to mid-size businesses, because they have unique needs that mid-size and large law firms aren't well-equipped to service. In addition to practicing law, I have started and run other businesses, and have an MBA in marketing from Indiana University. I combine my business experience with my legal expertise, to provide practical advice to my clients. I am licensed in Ohio and California, and I leverage the latest in technology to provide top quality legal services to a nationwide client-base. This enables me to serve my clients in a cost-effective manner that doesn't skimp on personal service.
Kimbrelly K.
Attorney Kegler has been licensed to practice law in the State of North Carolina since 1998. Over the years, she has worked in firms that focused on small business financing, initial startup formation, to starting several businesses of her own with bootstrap financing to venture capital funding. As a Certified Dream Manager, she couples the skills of listening to understand the big picture to get to solutions that not only fit today's needs but also the long term needs of her entrepreneurial clients.
June 14, 2023
James S.
Education Jim Schroeder holds multiple degrees from several institutions. He received his Juris Doctor from Rutgers School of Law in Camden New Jersey. He also earned two additional Master’s Degrees from Asbury Theological Seminary in Wilmore, Kentucky and United Theological Seminary in Dayton, Ohio. In addition, Schroeder has done graduate work in Public Sector Labor Relations and American History at Rutgers University and Nonprofit Leadership at Duke University. Jim Schroeder was admitted to the New Jersey Bar Association in 2008; the District of Columbia Bar Association in 2010; the New York State Bar Association in 2014; and the Ohio Bar Association in 2020. He is also admitted to the Federal Courts of Southern New Jersey and Southern Ohio.
June 14, 2023
Amanda K.
I have strong analytical and oratory skills that will undoubtedly assist in the identification of legal issues and the creation of a strategy that is in the best interest of the client.
August 20, 2023
Julius T.
With 20 years of law practice experience, Julius is an accomplished and experienced attorney. Julius provides counsel to individuals, businesses, churches and other nonprofits, ministry leaders, and entertainment and creative artists on matters involving drafting, reviewing, and negotiating contracts; corporate formation and governance; real estate transactions; information technology; employment and human resources concerns, and last wills and testaments. A graduate of Emory University and the University of Georgia School of Law, Julius has notably served as counsel to the Georgia General Assembly (Georgia House of Representatives and Georgia State Senate) and the City of Atlanta / Hartsfield-Jackson Atlanta International Airport. Julius is also a licensed Realtor® and a native Atlantan.
June 14, 2023
David W.
David is an experienced attorney specializing in estate planning, contracts, commercial law, and trademarks. In addition to his 9 years as an attorney, he also brings additional financial services experience as a registered investment advisor, stockbroker, and life insurance agent. David is known for his attention to detail, strong communication skills, and dedication to achieving favorable outcomes for his clients.
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Commercial Lease Review
Location: Washington
Turnaround: Less than a week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 25
Number of Bids: 5
Bid Range: $450 - $750
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