Office Rental Lease Agreement: A General Guide
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What is an Office Rental Lease Agreement?
An office rental lease agreement, also known as an office space lease or commercial lease, is a legally binding agreement made between a tenant (lessee) and landlord (lessor) that outlines the terms and conditions for renting commercial office space. The tenant is typically asked to review and sign the lease agreement that is prepared by the landlord.
Commercial leases will outline terms, like rent amounts, rent escalations, what the property can be used for, who pays for expenses, and more. Understanding these lease terms is critical for both the landlord and tenant to make sure both are legally protected and happy with the deal negotiated between the two parties.
Office space lease agreements are commonly agreed for five-to-ten-year periods. The term of the lease can vary, but this is a common length. The reason is the landlord does not want to re-negotiate with a new tenant each year, and would rather find good tenants that pay rent on-time.
Common Types of Office Rental Lease Agreements
There are many different types of commercial lease agreements, all of which have different implications. Common office rental lease agreement types are below:
- Net Lease. A net lease is when the tenant is responsible for paying base rent, as well as utilities, maintenance, and insurance.
- Gross Lease. The tenant pays a fixed rent payment each month, with the landlord being responsible for all other expenses.
Standard Terms in an Office Rental Lease Agreement
A office rental lease agreement will have varying terms depending on the property, but below are lease terms you will typically find which are important to understand:
Rent Amount, Escalations
Within a lease agreement, there will be a section that outlines the monthly rent to be paid by the tenant. There may also be built-in rent escalations over time. It is important to understand the full costs of the lease, not just for the first year, but for all outer years where there may be rent escalations.
Lease Length
The term of the lease will be outlined in the lease agreement. For commercial leases for office space, it is normal to see a five to ten year lease term.
Modifications, Improvements
Offices typically requires modifications to the commercial space, so that the business can build out what they need. There is typically a section in the lease that outlines what the tenants can and cannot do as it relates to renovating the property.
Maintenance, Repairs
With most commercial spaces, there is maintenance required and a need to repair things. A commercial lease will outline which party is responsible for these costs.
Subleasing
It can be common for tenants to sublease part of their space to another party, especially if they are leasing square footage that isn’t being used. A lease agreement will address the rights of the tenant to sublease, and the process by which they can do it.
Lease Termination
Occasionally, businesses can get into financial trouble or a relationship between a landlord and tenant can becoming contentious. For these situations, the lease agreement will outline the acceptable reasons and process for terminating the agreement.
Seeking Professional Advice
Whenever you are asked to sign a commercial lease agreement, we recommend seeking professional legal advice. A commercial real estate lawyer will be able to help you draft or review a commercial lease, and make sure your rights and interest are best protected.
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Christopher M.
I am a corporate attorney with several years of experience with contracts, corporate and business, government projects, and employment law.
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Benjamin E.
Benjamin is an attorney specializing in Business, Intellectual Property, Employment and Real Estate.
"Really appreciated working with Benjamin. While he is a busy man, he made the time to complete the work on time in a quality manner. Would definitely recommend Benjamin and will definitely work with him again if needed."
Daron J.
On this platform I have largely been helping people draft prenuptial agreements for many different situations as well as mediation/arbitration. I am an entertainment attorney by trade with experience in drafting and negotiating contracts in the fields of television, film, unscripted, music, and everything each entails. In addition, I have experience drafting and negotiating property leases and service agreements of various types. I am available for all types of contractual review or any drafting needs you may have.
"Daron was great to work with—very responsive, clear in his communication, and delivered exactly what I was looking for. He made the process smooth and efficient. Would definitely recommend."
Talin H.
Talin has over a decade of focused experience in business and international law. She is fiercely dedicated to her clients, thorough, detail-oriented, and gets the job done.
July 29, 2021
Stanley K.
Stan provides legal services to small to medium-sized clients in the New England region, and throughout the U.S. and abroad. His clients are involved in a variety of business sectors, including software development, e-commerce, investment management and advising, health care, manufacturing, biotechnology, telecommunications, retailing, and consulting and other services. Stan focuses on the unique needs of each of his clients, and seeks to establish long term relationships with them by providing timely, highly professional services and practical business judgment. Each client's objectives, business and management styles are carefully considered to help him provide more focused and relevant services. Stan also acts as an outsourced general counsel for some of his clients for the general management of their legal function, including the establishment of budgets, creation of internal compliance procedures, and the oversight of litigation or other outside legal services.
Sam W.
Sam Widdoes has practiced law in California since 2014. He began his career as a litigation associate at a boutique firm in Los Angeles, and founded a production development company with a partner in 2017. Since then, Sam has served as the head of business and legal affairs at District 33, while working hand-in-hand with writers, directors and actors to develop, pitch and produce scripted and unscripted content. In that role, Sam produced the documentary series BLACKBALLED for Quibi/Roku, and will produce the upcoming documentary feature AS WE SPEAK directed by J.M. Harper for Paramount+/MTV, and the doc series THE BLACK BOX for MRC and XYZ Films. He is also the executive producer of an upcoming limited series with CBS TV starring Judith Light and Noah Wyle called SHADOWS IN THE VINEYARD, and a feature comedy for Spyglass Entertainment, among other projects. In early 2022, Sam opened WIDDOES LAW, APC, after recognizing a need for experienced legal services in the unscripted and documentary spaces. Since opening his own practice, Sam has advised producers, editors, directors and rights holders on a variety of agreement negotiations, including option purchase contracts, collaboration agreements and documentary producer deals. Sam also serves as production counsel for several documentary features, series and short films, and will draft, negotiate and advise on all legal aspects of the projects, including financing, production and distribution. Sam earned his Juris Doctor from The Catholic University of America, Columbus School of Law in 2013, where he graduated on the Dean's List and as a member of the Society of Trial Advocates. He holds a BA in journalism from the University of Richmond, and sits on the Board of Trustees at Turning Point School in Culver City, California. Sam is passionate about quality storytelling, and supporting those with the vision and drive to share their stories with the world.
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Robert D.
Robert is a skilled corporate lawyer, licensed to practice law in NY and DC. He has over 25 years of experience, with a focus on Venture Capital, Private Equity, M&A, General Business Law and Company Formation. Robert brings business side experience to every legal transactions. This allows him to shape a client's legal needs around its business goals to drive success in an effective and efficient manner.
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Commercial Lease Review – Small Business Tenant (Washington)
"Thank you!"
Review Commercial Lease for a Boutique Fitness Studio
"Zachary was amazingly quick with my review, and although he was very communicative, his comments were so clear and thorough that I didn't require a follow-up discussion. Also, the contracting party accepted his recommendations with no pushback. Thanks!"
Review Commercial Lease for a Boutique Fitness Studio
"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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"Amazing to work with, answered all my follow-up questions without hesitation. Highly recommend Michael."
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"Zachary was prompt, clear, and helpful in reviewing our commercial lease agreement and providing redlines. Would be happy to work with him again."
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