ContractsCounsel Logo

Commercial Space Lease

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 10,572 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Types of Contracts Commercial Space Lease

Jump to Section

What is a Commercial Space Lease?

A commercial space lease is a legal document between a tenant and a landlord that governs the leasing of commercial real estate, such as an office space. In order to be rented under a commercial space lease, the property must be used solely for business purposes or contain only business property, such as in a self-storage facility.

What’s Typically Included in a Commercial Space Lease?

A commercial lease is a vital part of renting business space for any entrepreneur. A commercial space lease differs from a residential lease agreement because it governs rentals that are used solely for business purposes. While a residential rental can be partially used for office space, a commercial rental cannot be used for residential purposes at all.

Renting a commercial space is an exciting endeavor for business owners, no matter whether they are new to the territory or seasoned professionals. Signing on a new space means discovering new possibilities, and understanding what to expect from a commercial space lease is a great asset in these situations.

Here is a quick overview of what’s included in a commercial space lease:

  • Base rent : the basic cost of renting the property, charged in combination with property taxes, insurance, and utilities in some scenarios
  • Occupancy : governs how many people can reside in the building at once, in accordance with state and federal laws and local fire codes
  • Rental period : how long the lease agreement is good for
  • Property expenses : includes cost of required renovations and modifications needed to do business and operating cost
  • Maintenance and repairs : who can make required maintenance and repairs and who will pay for them
  • Property taxes : how much is due yearly for property taxes and who will pay for them
  • Insurance : minimum property insurance requirements and who is responsible to make payments towards insurance premiums
  • Utilities : which companies service utilities for a property and who is required to make utility payments

Check out this article to learn more about what’s included in a commercial space lease.

Meet some lawyers on our platform

Sara S.

119 projects on CC
CC verified
View Profile

Jeremiah C.

96 projects on CC
CC verified
View Profile

Damien B.

12 projects on CC
CC verified
View Profile

Scott S.

60 projects on CC
CC verified
View Profile

Types of Commercial Space Leases

Commercial space leases typically fall under three categories: standard, single net, double net, and triple net leases. Each type of lease has its own requirements and the base rent for each lease differs based on what other costs a lessee is responsible for.

Here is an in-depth guide about what a lessee should expect from each lease type:

Standard Leases

Standard leases are the closest commercial space lease type to residential space leases. When a lessee signs a standard lease, they are only responsible for the base rent of a property. The landlord, on the other hand, is responsible for property taxes, insurance premiums, repair and maintenance, and sometimes utilities.

Businesses who sign standard leases usually pay the most in base rent when compared to other lessors of other types of commercial space leases.

Single Net Leases

In a single net lease scenario, the lessee is responsible to pay base rent charges and property taxes. Single net leases are attractive to lessees because they involve minimal risk since the landlord is responsible for a majority of the expenses incurred by the rental space. Single net leases are the least common type of commercial space lease.

Since lessees are responsible for property taxes, their rent is typically lower than a standard lease, since they pay slightly more than a standard lessor yearly. In a single net lease situation, landlords may find themselves on the hook for missed property tax payments to the municipality, which leaves them responsible to pay. For this reason, landlords usually prefer to include property tax payments in the rent, where they can deduct and set them aside to ensure proper payment.

Double Net Leases

When a lessor agrees to a double net lease, they are agreeing to pay:

  • Base rent
  • Property taxes
  • Insurance premiums

Double net leases are the most common type of commercial space lease and are beneficial to lessors since the landlord is responsible for repair and maintenance costs, which can be costly.

Many commercial space lease agreements involve large business developments where several spaces are leased. When this happens, landlords typically charge the property’s costs in accordance to the percentage of the total square footage of the building. This ensures that each tenant is charged a fair amount and that the landlord has sufficient funds available to cover the costs of the building.

Triple Net Leases

Triple net leases involve the lessor paying:

  • Base rent
  • Property taxes
  • Insurance premiums
  • Repair and maintenance costs

This type of lease is attractive to business owners because it usually involves the lowest base rent cost out of the three types of commercial leases, but it is not always an ideal option.

When repair and maintenance costs are needed, they can be expensive. In some cases, the price tag on these items can exceed the amount of money a company has to spend. Sometimes, companies will attempt to get out of their lease when exorbitant repair bills are needed. However, landlords are prepared for this.

When a triple net lease is signed, landlords will often include a clause that entails a bondable net lease. A bondable net lease demands that renters fulfill their lease agreement in accordance to the originally agreed-upon amount of time and that they must pay any agreed-upon costs during this time period.

Lessors are not entitled to rent concessions, regardless of the types of repairs or maintenance needed on a property.

Here is an article with more details about the types of commercial space leases out there.

ContractsCounsel Commercial Space Lease Image

Image via Pexels by Pixabay

Reviewing Your Commercial Space Lease

Making sure a commercial space lease is right for you is imperative to making a sound leasing decision.

Here are a few important considerations to entering into a commercial space lease:

Customer Base

The customers you serve are the most important consideration when renting a commercial space. As you browse the commercial space market, consider these questions:

  1. Where do my customers live?
  2. What areas might my customers be willing to do business?
  3. What type of environment will attract my customers?

Property Zoning

Commercial buildings are zoned for specific uses. If you run a retail store, for example, you need to rent a space that is zoned for retail use. Further, you cannot run a retail store out of a space zoned for warehousing.

Size Requirements

Each commercial space has a limit on the number of people allowed inside at once. If you have a considerable customer base, you should only consider spaces that allow for a large amount of people inside at once.

On the other hand, even businesses with a conservative following have the opportunity for unexpected growth, so avoid renting a space that is too small to allow for considerable growth in a small amount of time.

Get Help with Commercial Space Lease Agreement

If you’re ready to rent a space for your business via a commercial lease agreement, you don’t have to go through the motions alone. Post a project on ContractsCounsel today to enlist the help of experienced real estate lawyers who specialize in commercial lease agreements and can give you valuable advice along the way.

Need help with a Commercial Space Lease?

Create a free project posting

Meet some of our Commercial Space Lease Lawyers

Joshua B. on ContractsCounsel
View Joshua
5.0 (6)
Member Since:
September 19, 2023

Joshua B.

Of Counsel
Free Consultation
Austin, Texas
22 Yrs Experience
Licensed in TX
University of Texas

Josh Bernstein has been serving real estate and corporate transactional clients since 2002. His experience is varied, and he enjoys working on and puzzling out novel and complex corporate and real estate matters. Josh’s experience includes, among other things, the following: representation of public companies in connection with SEC reporting and compliance work (proxies, 10-K’s; 10-Q’s; 8-K’s, etc.); representation of public and private company securities issuances (including private placements, and other similar offerings); assistance in structuring and drafting joint ventures, both for investors and operating partners, and including both real estate and corporate ventures; handling public and private company mergers and acquisitions; and asset sales and dispositions; assisting clients, big and small, with real estate acquisitions, sales and financings; managing large-scale and multi-state real estate portfolio acquisitions, dispositions and financings; complex condominium creation, structuring and governance work, including: commercial condominiums, use of condominiums as a land planning tool, wholesale condominium property acquisitions and dispositions, and rehabilitating failed or faulty condominium legal structures to make ready for sale; development of restrictive covenants and owners’ association documents for master-planned communities; compliance with federal statutes governing real estate sale and development (including, without limitation, the Interstate Land Sales Full Disclosure Act, the Housing for Older Persons Act, and the Americans with Disabilities Act); representation of real estate lenders, for both improved and unimproved property, and including numerous construction financings secured by real estate; assistance with commercial leasing; from both the landlord and tenant side, and including condominium leasing; training residential home and condominium sales staff for compliance with applicable local and federal law; and workouts of all kinds. When he’s not busy lawyering, Josh may be found watching 80’s commercials, flying a single-engine plane, playing poker, or trying to be a good dad.

Vicki P. on ContractsCounsel
View Vicki
5.0 (4)
Member Since:
June 30, 2023

Vicki P.

Attorney
Free Consultation
Danville, Pennsylvania
25 Yrs Experience
Licensed in PA, WI
Regent University School of Law

Vicki graduated from Regent University School of Law in Virginia Beach, Virginia in 1996. She is a licensed attorney. She has been admitted to Wisconsin since 1998 and Pennsylvania since 1999.

Anand A. on ContractsCounsel
View Anand
5.0 (38)
Member Since:
July 17, 2022

Anand A.

Counsel
Free Consultation
Philadelphia, PA
10 Yrs Experience
Licensed in NJ, PA
Rutgers University School of Law

Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.

Julian H. on ContractsCounsel
View Julian
5.0 (4)
Member Since:
July 14, 2020

Julian H.

Business Attorney
Free Consultation
San Antonio, Texas
22 Yrs Experience
Licensed in MD
Howard University School of Law

I am a business attorney with years of experience advising individual entrepreneurs and small businesses on issues ranging from entity selection/formation to employment law compliance, to intellectual property protection and exploitation. I often act as General Counsel for my clients fulfilling the legal function as part of a team of managers. I look forward to learning more about your business and how I may be of assistance.

Christopher R. on ContractsCounsel
View Christopher
5.0 (11)
Member Since:
August 25, 2020

Christopher R.

Attorney
Free Consultation
Boston, MA
10 Yrs Experience
Licensed in MA, NH
Suffolk University Law School

Corporate and transactional attorney in sixth year of practice. Focus areas include general corporate counsel, labor and employment law, business partnership matters, securities matters related to privately-held companies, and regulatory compliance in securities and finance matters.

Forest H. on ContractsCounsel
View Forest
5.0 (52)
Member Since:
July 14, 2020

Forest H.

Attorney
Free Consultation
Nashville, TN
26 Yrs Experience
Licensed in FL, TN, TX
Washington and Lee University

Forest is a general practice lawyer. He provides legal advice regarding small business law, contracts, estates and trusts, administrative law, corporate governance and compliance. Forest practiced complex commercial litigation in Florida for eight years, representing clients such as Host Marriott, Kellogg School of Business, and Toyota. Since moving to Nashville in 2005, he has provided legal advice to clients forming new businesses, planning for the future, and seeking funding through the use of equity and/or debt in their businesses. This advice has included the selection of business type, assistance in drafting and editing their business plans and offering material, reviewing proposed term sheets, and conducting due diligence. Forest is a member of the Florida, Tennessee, and Texas Bars; in addition. Forest has held a Series 7, General Securities Representative Exam, Series 24, General Securities Principal, and Series 63, Uniform Securities Agent State Law.

Find the best lawyer for your project

Browse Lawyers Now

Need help with a Commercial Space Lease?

Create a free project posting
Real Estate lawyers by top cities
See All Real Estate Lawyers
Commercial Space Lease lawyers by city
See All Commercial Space Lease Lawyers

ContractsCounsel User

Recent Project:
Corporate Office Lease Agreement Review
Location: Pennsylvania
Turnaround: A week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 75
Number of Bids: 7
Bid Range: $99 - $7,500

ContractsCounsel User

Recent Project:
Commercial Lease Review for Axe Throwing Business
Location: Michigan
Turnaround: Less than a week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 25
Number of Bids: 4
Bid Range: $600 - $845
related contracts
See More Contracts
other helpful articles

Need help with a Commercial Space Lease?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city