Texas Commercial Lease: Types, Key Terms To Know, Costs

A Texas commercial lease is an agreement between a landlord and a renter for the renting of commercial property for business purposes. Commercial lease agreements are more complicated than residential leases and need to guarantee that the financial terms of the agreement will remain stable upon renewal. Hence, the agreements must frequently get negotiated between the landlord, the tenant(s), and their corresponding attorneys.

A commercial lease also specifies the rights and obligations of each party and rules regarding subletting and late payment fees. The leasing agreement is valid once it has been signed by the two parties and is upholdable in court.

Elements of Texas Lease Agreement

While most U.S. states share similar elements of a Texas business lease agreement, landlord-tenant regulations require specific details. Below are some of the primary elements of a Texas commercial lease agreement.

• Offer

  The initial stage of a lease is to make an offer with specific terms included in the agreement such as the names of the landlord and the tenant clearly and that is disclosed to the other party.

• Mutual Assent

  The offeror has the right to withdraw the offer or establish a deadline for accepting it. The party that accepts the offer should clearly state the acceptance to the offeror. A lease is not a contract unless there is mutual approval also called ‘meeting of minds’. In case of any proof of fraud used to trick one party into accepting the agreement, the Texas Court will not enforce a lease.

• Lease Delivery

  Under Texas law, it is mandatory that commercial real estate leases with a term of more than one year must be in writing to be enforceable. However, oral leases of less than one year are permitted.

• Consideration or Legal Value

  The next stage in a commercial lease agreement is giving ‘something of value’ in exchange for something else of value. Usually, a security deposit i.e., rent is paid in exchange for occupying the property in commercial real estate leases. However, a security property is not a consideration unless the lease agreement states so.

  Texas law defines a deposit as “any advance of money, other than a rental application deposit or an advance payment of rent, that is intended primarily to secure performance under a lease of commercial rental property.”

• Security Deposit Payment

  Indicate the accepted methods of payment and the security deposit sum that the renter will be expected to pay. According to Article 93 of the Texas Property Code, corporate landlords must return a tenant's security deposit within 60 days of the tenant moving out.

• Term of the Lease

  Include a description of the lease's beginning and end dates. What will happen if the tenant remains on after the lease ends or shuts down their business? Specify this in the commercial leasing agreement. If the renter has the authority to sublease the premises, you can also record it in the agreement.

  You must also include information about lease termination in the terms of the lease agreement section. Any notice requirements or early termination fees must be stated clearly.

  Discuss the ramifications of the tenant selling the business to a third party. Mention whether the new business owner will instantly inherit the lease or if a new lease must get negotiated.

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Conclusion

Repairs and maintenance are often the landlord's responsibility. However, there may be instances where the renter would be in charge. Regular housekeeping chores and yard mowing are included. You must also discuss maintaining and making repairs to the parking lot.

Specify who is responsible for repaving, fixing potholes, marking lines, and other maintenance tasks. Remember that you will likely be responsible for major repairs, such as road repairs, but you could prefer that your renters handle routine upkeep. However, if you still face difficulties drafting a Texas commercial lease, get in touch with our expert attorneys at ContractsCounsel. You can compare multiple free proposals from vetted lawyers and save 60% less than traditional law firms - start your job proposal here.