ContractsCounsel Logo

Commercial Space Lease Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 10,509 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Types of Contracts Commercial Space Lease Agreement

Jump to Section

A commercial space lease agreement refers to a contract for any kind of business to rent office spaces or other business properties from a landlord in the U.S. The term 'commercial' means that the particular lease is for different business activities rather than housing. A commercial tenant can be either a sole proprietor who has a small business or someone who runs a major multinational corporation. Meanwhile, let us learn more about a commercial space lease agreement in detail below.

Types of Commercial Space Lease Agreements

The commercial space lease agreement should state the type of lease and the basis on which one calculates rent. These are usually standard arrangements but are subject to negotiation. Meanwhile, here are the common types of commercial space lease agreements:

  • Net Lease Agreement: In this kind of commercial space lease agreement, the related tenant pays all or part of taxes, insurance, or maintenance costs. These would otherwise be incurred by the specific landlord apart from the stated rent.
  • Double Net Lease Agreement: In this kind of agreement, the tenant pays taxes, insurance, and rent.
  • Triple Net Lease Agreement: This commercial space lease agreement requires the tenant to pay taxes, maintenance, insurance, and rent.
  • Percentage Lease Agreement: The rent associated with this particular agreement is based on a specified percentage of the tenant's sales and profits.
  • Fully-serviced Lease Agreement: The rent includes utilities and other services that the tenant would pay for separately. This kind of lease is common in office buildings with several tenants.

Knowledge Tip: You can also download this template for your reference.

Important Terms in a Commercial Space Lease Agreement

Several items are commonly included in a commercial space lease agreement. They only apply if they are included in the commercial space lease negotiations with the landlord. Here are some basic terms with their associated questions:

  • Lease Term: How long is the particular lease? Will it ever end on a fixed date, or is it always subject to different conditions? Does either the tenant or landlord have an option to extend it or cancel early?
  • Rent: How much is the base rent of the particular commercial property? Does it increase during the set periods? What other extra charges are included in addition to the rent?
  • Other Costs: Who pays for all the items? Who is in charge of the specific building insurance, property taxes, and other kinds of routine maintenance?
  • Security Deposit: How much is the particular deposit, and when may the property’s landlord withhold it?
  • Permitted Use: Is this particular lease only for specified commercial activities? If so, the tenant may also not engage in other business activities without the permission of the property’s landlord.
  • Exclusive Use: Does the tenant always get the exclusive rights to perform certain activities? This happens within a larger property with many tenants.

Knowledge Tip: Need an answer to these questions? Check this video.

Meet some lawyers on our platform

Ken S.

6 projects on CC
CC verified
View Profile

Alan B.

10 projects on CC
CC verified
View Profile

Damien B.

10 projects on CC
CC verified
View Profile

Jeremiah C.

95 projects on CC
CC verified
View Profile

Commercial Space Lease Agreement Vs. Residential Lease Agreement

There are several differences between a commercial space lease agreement and a residential lease agreement. These include the following:

Particulars Differences
Including Varied Terms Landlords always use lease agreement templates for all kinds of residential leases because there are fewer tenant requirements. Commercial space lease agreements, on the other hand, have varied terms because every tenant’s requirement is different.
Adding Negotiable Terms Commercial space lease terms are negotiable in most cases. Terms subject to such a change include the rent amount, the associated rent increases, the length of the specific lease, the ability to assign a lease, and all the other allowable improvements.
Working with Longer Terms Most residential leases remain for a maximum of a year in the United States. Whereas commercial space lease agreements are functional for several years.

Things to Keep in Mind When Signing a Commercial Space Lease Agreement

Although commercial space lease agreement tenants have fewer legal protections on the theory that they are more business-savvy as compared to other residential tenants. So, what is the solution here? Lessors and lessees of such lease agreements need to address other factors in their commercial space lease, which include:

Particulars Things To Keep in Mind
Including Pass-through Costs A commercial space lease agreement always allows the property owner to pass through the costs. These may be related to operating or even leasing out the building to other renters. Pass-through costs may include different utilities, common area maintenance, and all kinds of property taxes. Pass-through costs may assist during rent negotiations. Yet, all business owners must look for them in the commercial space lease agreement.
Taking Leased Premises Measurement The respective tenant's obligations for rent and maintenance always depend on the square footage of the associated premises. Legal issues often begin when the commercial space lease agreement is unclear. The confusion is usually about where those measurements begin. Tenants may often believe the premises consist of the interior of the respective building. Yet, a few landlords measure the outdoors instead.
Doing Improvements and Alterations The commercial space lease agreement must always clarify who is responsible for the initial build-out. The same person must also look after the load-in following the opening of the particular business. Things should be made clear in the agreement if the landlord must provide any materials or have the property in a particular condition before the future tenant moves in. The specific agreement must also clarify who handles any future maintenance or alterations.
Handling Natural Disasters and Eminent Domains Almost no place in the United States or any other part of the world is safe from any kind of disaster. The landlord and tenant may have their respective insurance. But what if the building is a loss or needs extensive repairs? These insurance policies may not be enough for both parties. The particular commercial space lease agreement must address what happens if the building needs renovations or in situations when the tenant must vacate it.

Key Terms for Commercial Space Lease Agreements

  • Lessor: A landlord who legally owns all the assets of a particular property. They lease a specific property or asset by giving the tenant the right to occupy or use it for a particular period.
  • Lessie: A tenant who pays rent to occupy a specific space or property for a particular period. They may be a legal entity, individual, or a company.
  • Term Sheet: An offer to lease that is usually used to guide the drafting of a contract and is commonly used during negotiations. It further outlines the commercial space lease agreement’s terms and conditions in bullet points.
  • Base Rent: The set amount that a particular lessee pays to the lessor each month. The payment is made to occupy the associated premise or use the particular asset.

Final Thoughts on Commercial Space Lease Agreements

Every lessee needs to have a thorough understanding of commercial space lease agreements, whether they are signing their first lease or getting ready for a move or a renewal. Unlike residential leases or other documents, commercial space lease agreements are very much "buyer beware." The rights of the lessor or the lessee are exactly as stated in the particular lease, with little to no other protections. That is why both parties must approach a professional lawyer with expertise in drafting a legal, commercial space lease agreement.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, Click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

Need help with a Commercial Space Lease Agreement?

Create a free project posting

Meet some of our Commercial Space Lease Agreement Lawyers

Shelia H. on ContractsCounsel
View Shelia
5.0 (12)
Member Since:
March 28, 2023

Shelia H.

Attorney
Free Consultation
Durham, NC
22 Yrs Experience
Licensed in NC
UNC- Chapel Hill School of Law

Shelia A. Huggins is a 20-year North Carolina licensed attorney, focusing primarily on business, contracts, arts and entertainment, social media, and internet law. She previously served on the Board of Visitors for the North Carolina Central University School of Business and the Board of Advisors for the Alamance Community College Small Business Center. Ms. Huggins has taught Business and Entertainment Law at North Carolina Central University’s law school and lectured on topics such as business formation, partnerships, independent contractor agreements, social media law, and employment law at workshops across the state. You can learn more about me here: www.sheliahugginslaw.com www.instagram.com/mslegalista www.youtube.com/mslegalista www.facebook.com/sheliahuugginslaw

Fabian G. on ContractsCounsel
View Fabian
4.5 (2)
Member Since:
May 9, 2023

Fabian G.

Managing Attorney at Apex Legal Solutions PLLC
Free Consultation
Miami, Florida
3 Yrs Experience
Licensed in FL
University of Miami School of Law

Fabian graduated with honors from the University of Miami School of law, where he served as the articles and comments editor for the law school's Race and Social Justice Law Review. He received the John F. Evans Memorial Scholarship Award for excellence in the university's Litigation Skills Program and the HOPE Pro Bono award for completing more than one hundred (100) pro bono hours. Additionally, he received the CALI Excellence for the future award in Sports Law. He focuses his practice on corporate, real estate and immigration matters. Fabian has experience representing luxury hotel owners and operators in connection with the drafting of hotel management agreements, restaurant license agreements, and complex restaurant leases for domestic and international projects including: Nobu Tulum, Nobu Punta Cana, Nobu Orlando, Nobu Chicago and the Nickelodeon Hotel in Riviera Maya, Mexico, among others. He has represented clients in the commercial real estate industry in connection with the drafting of purchase and sale agreements, promissory notes, and mortgages. Lastly, Fabian routinely counsels corporate clients in connection with the drafting of articles of organization, operating agreements, and other documents related to acquisitions, restructurings and investments.

Mathew K. on ContractsCounsel
View Mathew
5.0 (2)
Member Since:
February 1, 2022

Mathew K.

Founding Attorney
Free Consultation
Illinois
9 Yrs Experience
Licensed in IL
DePaul University College of Law

Kerbis' practice includes business and real estate transactions, estate planning, and limited scope litigation consulting. Mathew has negotiated deals involving multinational corporate franchises and has collectively helped hundreds of clients with their transactional, civil litigation, and appellate legal needs. Throughout his tenure as an American Bar Association leader, Mathew has advocated for legal education reform, interviewed ABA Presidents and State Appellate and Supreme Court Justices, and lobbied Congress on behalf of the legal profession. As a law student, Mathew served as an extern for the Honorable Justice Robert E. Gordon of the Illinois Appellate Court, First District.

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 (51)
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 Agreement?

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

ContractsCounsel User

Recent Project:
Review of contract
Location: Oklahoma
Turnaround: Over a week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 31
Number of Bids: 11
Bid Range: $400 - $975

ContractsCounsel User

Recent Project:
Getting ready to sign a lease on my first commercial business space
Location: Wisconsin
Turnaround: A week
Service: Contract Review
Doc Type: Commercial Lease
Page Count: 50
Number of Bids: 4
Bid Range: $750 - $1,145
related contracts
See More Contracts
other helpful articles

Need help with a Commercial Space Lease Agreement?

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