Texas Commercial Lease: Types, Key Terms To Know, Costs
Quick Facts — Commercial Lease Lawyers (Texas)
- Avg cost to draft a Commercial Lease: $1320.00
- Avg cost to review a Commercial Lease: $800.00
- Lawyers available: 82 Texas real estate lawyers
- Clients helped: 75 recent commercial lease projects in Texas
- Avg lawyer rating: 4.97 (12 reviews)
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.
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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.
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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.
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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.
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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.”
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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.
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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.
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.
Frequently Asked Questions
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Mark D.
Partnering with business clients to keep their greatest asset - their employees - from becoming their biggest liability. Mark accomplishes this by working with in-house counsel and human resource professionals of several Fortune 50 companies, as well as many smaller public and privately held profit and not for profit organizations, to provide advice and counsel on the day to day employment and workforce practice issues encountered by those organizations. For over fifteen years Mark has been Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. He is licensed and practices in both Texas and Colorado and has focused his practice for the last 20 plus years on defending companies in employment and labor related matters. During this time Mark has had extensive experience in handling and responding to a wide range of local, state and federal employment issues that impact the management and operations of businesses in a wide range of industries. Mark's experience includes appearances before state and federal agencies and regulatory boards, litigation in both state and federal courts, defense of class actions and appearances before courts of appeal. While Mark regularly handles matters in litigation, he has a high regard for handling every issue with the best interest of the client’s business. Mark is a published author and regular speaks on labor, employment and workplace practice topics. Whether it be an investigation by the Occupational Safety and Health Administration (OSHA), the Wage & Hour division of the U.S. Department of Labor, or other state agency; an Equal Employment Opportunity Commission (EEOC) or state agency charge claiming a violation of local, state or federal employment or labor laws; or the need for direction on a hiring, termination or business operational issue involving employees, Mark has extensive experience in handling these and many other employment and labor issues.
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Charlton M.
Charlton Messer helps businesses and their owners with general counsel and contract drafting services. He has helped over 500 businesses with their legal needs across a variety of industries in nearly a decade of practice.
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July 8, 2022
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Ahaji Amos, PLLC is a Houston-based intellectual property and civil litigation firm servicing clients throughout the U.S.
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Craig C.
I have 31 years of experience with drafting, editing, revising, reviewing and amending business and commercial contracts and agreements of all kinds. I have an extensive commercial/civil litigation background as well as years of healthcare regulatory experience.
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Myron M.
For over 20 years Myron E. Mims Esq. has provided legal and consulting services to small and medium sized businesses. Mims served as regional counsel for a real estate investment and development firm where he managed the Company’s contract execution and management, and dispute resolution affairs. Mims was responsible for oversight and risk management of all legal affairs, including management of a robust litigation docket consisting of a seven figure, multi-party construction lawsuit, and multiple vendor and tenant disputes. Mims prepared new contract docs and implemented execution and management processes that lead to the reduction of litigation. As a managing partner of Nixon Mims, LLP Mims provided legal and consulting services to clients of that consisted of real estate, construction, telecommunications, media and food industry businesses. Mims routinely assisted clients with developing corporate governance and management protocols, strategic planning initiatives, and advised clients in the negotiation and execution of complex business transactions. Mims routinely provided operational oversight and technical analysis for management. During this period Mims obtained firsthand experience of the access to capital impediments and challenges that growth-stage businesses face.
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David W.
Founder David W. Weygandt, the Singing Lawyer, is passionate about helping families and businesses stay in tune with what they care about and avoid conflict. When injustice has been done, David is proud to stand up to the modern Goliath and vindicate your rights on your behalf. David lives and practices law in The Woodlands, Texas, and assists clients all across Texas.
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"Will did a great job of reviewing our commercial lease and explaining the legal implications in a clear way. We hope to work with him again in the future."
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"I had a relatively quick and satisfactory experience with Zachary to review a commercial lease. I would recommend him to other projects."
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Small Business
Commercial Lease
North Carolina
What's the repair responsibility in a commercial lease?
I am a small business owner in the process of signing a commercial lease for a retail space. I am trying to understand my responsibilities as the tenant regarding repairs and maintenance of the property. I want to make sure I understand what my repair responsibility is in the lease before signing it.
N'kia N.
In a North Carolina commercial lease agreement, it is common for the landlord to be responsible for major maintenance and repairs (including structural issues) and the tenant to be responsible for minor maintenance and repairs (including general wear and tear). However, the landlord and the tenant may agree to alternative arrangements in the written lease. The best way to more fully understand your specific maintenance and repair responsibilities under a specific lease agreement is to have an attorney review the agreement and discuss it with you. Good luck!
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]]."
Real Estate
Commercial Lease
Florida
What's the force majeure clause in a commercial lease?
I am a small business owner who is in the process of signing a commercial lease for my business. I am concerned about the implications of force majeure clauses in the lease and would like to understand them better. I have read through the clause, but am not sure if it covers all of the situations that may arise and if there are any additional considerations that I need to take into account. I would like to understand the full implications of the clause and any additional steps I should take to protect myself.
Moss S.
Force majeure is a provision that usually allows either party to delay completing an obligation in a lease. Force majeure is described as an act that is beyond the control of either party, such as a natural disaster, terrorism, or pandemic.
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.
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