Alabama Commercial Lease: Types, Key Terms To Know, Costs
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An Alabama lease agreement is a lawful contract between an individual or business that holds the commercial property or the landlord and the individual or organization who will rent the commercial property or the tenant. In addition, most commercial lease contracts in Alabama are known as a sublease, indicating the lessor is leasing out a part of their real estate property.
Furthermore, when the lessor consents to rent a portion of their property that the tenant can use for commercial purposes, this contract becomes a legally binding agreement in Alabama. However, before entering a commercial lease, the lessor generally demands a personal guarantee if a company owns few assets or was created recently. This individual guarantee puts the liability and obligation on the business owner for the lease contract's execution.
How to draft Alabama Commercial Lease?
As you write a commercial lease contract for use in Alabama, it is necessary to comprehend that the procedure will usually undergo various modifications and drafts. In addition, you must begin the procedure by agreeing orally on several fundamental issues:
- Base rent
- Lease term
- Renewal options
Furthermore, your lease contract should comprise a title with the official addresses and names of the lessee and lessor. Subsequently, you can incorporate any of the following areas into your Alabama commercial lease term:
- Explanation of premises being rented
- Agreement provisions
- How the premises being rented will be used
- Renewal choices
- Specified security deposit
- Expenses and rent sum (include whether the agreement is modified gross, gross, or triple net)
- Default on rent (the fine for a late fee)
- Modifications the tenant is entitled to make
- Any extra miscellaneous provisions of the agreement
- Contact data for the landlord and tenant for statutory purposes
- Signature from each person (for corporate lease contracts, the signatures should be certified by a notary public)
CC verified
Another alternative for your Alabama commercial lease contract will include the following:
- Agent's name (if applicable)
- Lessor's name
- Tenant's name
- Lease terms
- Description and use of the land being leased
- Base and extra rent sum
- Late payments
- Required security deposit amount
- How lessee will take control
- Provisions of the premises being leased
- Waiver from the agent (if relevant)
- Nuisance
- Repairs managed by the lessor
- Outside spaces and roof condition
- Showing and inspection provisions
- Maintenance, repairs, compliance, and utilities by the tenant
- Improvements, alterations, signs
- Whether the leased property holds any liens
- Any faults of the premises being leased
- Indemnity and general liability insurance
- Default circumstances
- Default attorney costs and fees, waiver of exemptions, and rent acceleration periods.
- Re-letting and vacation of the property
- Additions and modifications of the property by the landlord
- Re-entry and No bar
- Fire and other damages
- Lease term fee provision, requirements, undertaking, and transfer
- Contract for agent's commission (if relevant)
- Demands and notices
- Subrogation rights waiver
- Hold harmless agreement
- Holdover
- Condemnation and prominent domain
- Provisions for cleaning the leased property when the agreement is terminated
- Attornment and subordination
- Insurance and taxes
- Addendum clause
- Requirements for the use of dangerous materials on the leased buildings
- Terms of the lease
- Legally binding effect of the contract
- Meaning of the term "landlord" or "lessor".
- Statutes and rules
- Commission to sign the legal contract
- The waiver from the Birmingham Association of Realtors, the release of lawsuits and disclaimer, and signatures of the landlord, tenant, and agent (if applicable)
And upon signing the contract, people involved in contract execution should obtain an original copy. Likewise, when the contract is implemented, the tenant should pay the demanded security deposit and obtain access to the commercial property based on the lease provisions. However, if you wish to use a simplified arrangement of the Alabama commercial lease agreement, it should comprise the following:
- Terms of the lease
- How will the tenant use the property
- Rental terms
- Terms for sublease and assignment
- Repair requirements
- Utilities
- Insurance
- Modifications and alterations
- Required property taxes
- Addition of signs
- Rules of the facility or property
- Condemnation
- Entry allowance
- Parking
- Quiet Possession
- Subordination
- Security deposit required
- Notice
If you wish to lease a commercial property in Alabama, our expert attorneys at ContractsCounsel are there to help you. So get in touch with our team now and discuss your lease terms with our professional lawyers.
Frequently Asked Questions
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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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John H.
John Daniel "J.D." Hawke is an experienced attorney with a law practice in Mobile, Alabama. He was born in Fairhope, Alabama and after earning his undergraduate degree at Auburn University, he received a law degree from Thomas Goode Jones School of Law in 2010. After law school, he formed the Law Office of J.D. Hawke LLC and over the last decade he has fought incredibly hard for each and everyone of his clients. His practice focuses on representing people facing criminal charges and clients dealing with family law matters. In addition to criminal defense and domestic relations cases, he also regularly handles contract disputes, personal injury cases, small business issues, landlord/tenant disputes, document drafting, and estate planning. He is licensed to practice law in the State of Alabama and the United States District Court for the Southern District of Alabama.
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Commercial Real Estate
Commercial Lease
Maryland
What are the notice requirements for terminating the lease?
I am a business owner who recently signed a commercial lease for a property. I am looking to terminate the lease but am unsure of the notice requirements I must adhere to in order to do so. I would like to know what the notice requirements are for terminating the lease so that I can ensure I do not breach the terms of the lease.
Michael C.
The notice requirements for terminating a commercial lease in Maryland are going to vary depending on the specific terms of your lease agreement. Please read and refer to your lease. If your lease is month to month, then it's likely you'll have to provide at least 30 days notice. If your lease is for a longer term (6 to 12 months), it's likely you'll have to provide at least 90 days notice, and may need to pay damages for breach of the lease agreement.
Real Estate
Commercial Lease
Ohio
How is the lease renewed at the end of the lease term?
I am a small business owner who recently signed a three-year commercial lease for my business. I am looking to understand the process of renewing the lease at the end of the three-year term. I am interested in learning more about the process, the timeline, and what I need to do to ensure that I can continue to operate my business at this location.
Paul S.
If your lease has a renewal option, then you renew by following that process, which involves giving notice during the specified time frame. If you did not include a renewal option in your lease, then you'll need to contact the landlord 6-12 months before the end of the term, and inform the landlord that you want to renew the lease. Then you'll have to negotiate the terms with the landlord.
Commercial Real Estate
Commercial Lease
North Carolina
How is the rent determined in a commercial lease agreement?
I am a small business owner looking to rent a space for my business. I am currently in negotiations with the landlord of a commercial property and we are discussing the terms of the lease agreement. We have reached a point where we need to discuss the rent and how it will be determined. I need to understand more about how rent is determined in commercial leases so that I can negotiate a fair and reasonable agreement.
N'kia N.
In North Carolina, commercial rent is commonly calculated as a set dollar amount per square foot. This dollar amount is usually based on factors like location, age, condition, accessibility, and amenities. However, there is no requirement for rent to be determined this way. Unlike a residential lease agreement, the terms of a commercial lease agreement can be almost anything that the parties mutually agree to. As a word of caution, in North Carolina, commercial tenants do not have the same degree of legal protections as residential tenants. For just one example, a tenant who wishes to terminate a commercial lease early may be responsible for the entire remainder of the rent unless the lease agreement says otherwise.
Real Estate
Commercial Lease
California
What's the property description in a commercial lease?
I am a small business owner who is looking to lease a property for my business. I am currently reviewing a commercial lease and am trying to understand what is included in the property description in the lease. I am hoping to gain more clarity on what the property description entails and how it affects my business.
Gagandeep K.
A property description in a commercial lease has to sufficiently identify the extent and boundaries of the property being leased. For example, it can be described by a map reference or by metes and bounds, or include a description such as "that certain building on the south-westerly corner of California and Larkin Streets." The commercial lease will include defined terms such as "Building," "Property," and "Premises". The defined terms define/describe the "Property" on which the "Building" is located which has the "Premises"/"Space" that is being leased. A sample definition of is Property Description in a Commercial Lease: ""Property" means the real property on which the Building is located together with the Building and all appurtenant fixtures and personal property of Landlord used in the operation of the Building and/or the Property, and any other improvements now existing or hereafter constructed thereon[, including the parking lot, walkways, and landscaped ground as depicted on the site plan attached hereto as Exhibit [LETTER]]."
Contracts
Commercial Lease
New York
What's the entire agreement clause in a commercial lease?
I am a small business owner who recently signed a commercial lease for my business premises. I am concerned about the “entire agreement” clause in the lease, as I am not sure what it covers and what the implications are for me and my business. I am looking for clarification on the clause and any potential risks associated with it.
Matthew S.
This is a contractual provision which aims to prevent the party relying on it from being liable for any statements or representations (including pre-contractual representations) except as expressly set out in the agreement. It generally precludes the introduction of parol evidence or evidences of other agreements that are not in writing.
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