Commercial Lease Agreement Template Download

COMMERCIAL LEASE AGREEMENT TEMPLATE FREE DOWNLOAD

This Commercial Lease Agreement (the "Agreement"), effective as of [Effective Date] (the "Effective Date"), is made and entered into by and between:

LANDLORD: [Landlord Legal Entity Name] A [State of Incorporation/Organization] corporation/limited liability company/individual Having its principal place of business at [Landlord's Full Address] (hereinafter referred to as "Landlord")

AND

TENANT: [Tenant Legal Entity Name] A [State of Incorporation/Organization] corporation/limited liability company/individual Having its principal place of business at [Tenant's Full Address] (hereinafter referred to as "Tenant")

JURISDICTIONAL BACKGROUND: This Agreement is made under and shall be governed by the laws of [Jurisdiction, e.g., the State of California].

RECITALS: WHEREAS, Landlord is the owner of certain real property located at [Property Address, including city, county, state, and zip code] (the "Property"), improved with a commercial building (the "Building"); and WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, a portion of the Building located at [Specific Unit Number/Suite Number, e.g., Suite 100] and consisting of approximately [Approximate Square Footage] square feet (the "Premises"), pursuant to the terms and conditions set forth herein; and WHEREAS, the parties intend for this Agreement to be a legally binding contract setting forth their respective rights and obligations with respect to the lease of the Premises.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

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1. Document Preamble & Recitals

Included above.

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2. Operational Definitions

For the purposes of this Agreement, the following terms shall have the meanings ascribed to them below:

2.1. "Additional Rent" means all sums, charges, or amounts (other than Base Rent) required to be paid by Tenant under this Agreement, including but not limited to charges for utilities, common area maintenance, insurance, real estate taxes, and any other costs or expenses designated herein as Additional Rent.

2.2. "Agreement" means this Commercial Lease Agreement, including all exhibits and addenda attached hereto, as it may be amended, modified, or supplemented from time to time.

2.3. "Base Rent" means the initial fixed monthly rental amount payable by Tenant to Landlord for the Premises, as specified in Section 3.2.1.

2.4. "Building" means the commercial structure located on the Property, which contains the Premises.

2.5. "Commencement Date" means [Commencement Date] (the date upon which the Term of this Lease commences).

2.6. "Common Areas" means all areas and facilities within the Property that are designated by Landlord from time to time for the common use or benefit of Landlord, Tenant, and other tenants of the Building, their employees, agents, customers, and invitees, including, but not limited to, parking lots, driveways, sidewalks, landscaped areas, lobbies, corridors, restrooms not exclusively within a tenant's premises, and utility rooms.

2.7. "Event of Default" means any of the events described in Section 4.1.

2.8. "Expiration Date" means [Expiration Date] (the date upon which the Term of this Lease expires, unless extended or earlier terminated in accordance with this Agreement).

2.9. "Hazardous Materials" means any substance, material, or waste that is now or hereafter becomes regulated or classified as hazardous, toxic, or dangerous under any federal, state, or local law, regulation, or ordinance, including, without limitation, petroleum, asbestos, polychlorinated biphenyls (PCBs), and lead.

2.10. "Lease Year" means each twelve (12) consecutive calendar month period during the Term, with the first Lease Year commencing on the Commencement Date.

2.11. "Permitted Use" means [Describe Specific Permitted Use, e.g., general office, retail sales of clothing, light manufacturing].

2.12. "Premises" means that specific portion of the Building identified in the Recitals, including all appurtenances thereto.

2.13. "Property" means the real property legally described in [Reference Exhibit A, if applicable, otherwise describe briefly: e.g., the parcel located at [Property Address]], including the Building and all other improvements thereon.

2.14. "Security Deposit" means the sum of money paid by Tenant to Landlord as security for the performance of Tenant's obligations under this Agreement, as specified in Section 3.3.

2.15. "Term" means the period commencing on the Commencement Date and ending on the Expiration Date, including any properly exercised renewal or extension periods.

2.16. "Total Rent" means the sum of Base Rent and Additional Rent.

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3. Substantive Terms & Obligations

3.1. Grant of Lease; Premises; Term. 3.1.1. Grant. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, subject to the terms and conditions set forth herein. 3.1.2. Condition of Premises. Tenant acknowledges that it has inspected the Premises and accepts the same in its "as-is" condition as of the Effective Date, subject only to any express representations or warranties made by Landlord herein. 3.1.3. Term. The initial term of this Agreement shall be for a period of [Number] ([Number]) years, commencing on the Commencement Date and expiring on the Expiration Date, unless sooner terminated or extended as provided herein.

3.2. Rent. 3.2.1. Base Rent. Tenant shall pay to Landlord Base Rent in the amount of [Dollar Amount] ($[Dollar Amount]) per month, payable in advance on the first (1st) day of each calendar month during the Term, without demand, deduction, or set-off. 3.2.2. Additional Rent. In addition to Base Rent, Tenant shall pay all Additional Rent as specified in this Agreement. All Additional Rent shall be due and payable by Tenant within [Number] ([Number]) days after Landlord provides Tenant with an invoice therefor, unless otherwise specified herein. 3.2.3. Proration. If the Commencement Date or Expiration Date does not fall on the first or last day of a calendar month, respectively, the Base Rent and any prorated Additional Rent for such partial month shall be prorated on a daily basis. 3.2.4. Late Charges. If any installment of Base Rent or Additional Rent is not received by Landlord within [Number] ([Number]) days after its due date, Tenant shall pay to Landlord a late charge equal to [Percentage, e.g., five percent (5%)] of the overdue amount. In addition, overdue amounts shall bear interest at the rate of [Percentage, e.g., twelve percent (12%)] per annum or the maximum rate permitted by law, whichever is less, from the due date until paid.

3.3. Security Deposit. 3.3.1. Amount. Upon execution of this Agreement, Tenant shall deposit with Landlord the sum of [Dollar Amount] ($[Dollar Amount]) as a Security Deposit. 3.3.2. Use. The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Agreement. Landlord may, but shall not be required to, use, apply, or retain the whole or any part of the Security Deposit to remedy any default by Tenant, to compensate Landlord for any damages sustained by reason of Tenant's default, or to repair damages to the Premises caused by Tenant (ordinary wear and tear excepted). 3.3.3. Return. Within [Number] ([Number]) days after the later of the Expiration Date or the date Tenant vacates the Premises, Landlord shall return the unused portion of the Security Deposit to Tenant, less any proper deductions.

3.4. Use of Premises. 3.4.1. Permitted Use. Tenant shall use the Premises solely for the Permitted Use and for no other purpose without Landlord's prior written consent, which consent Landlord may grant or withhold in its sole discretion. 3.4.2. Compliance with Laws. Tenant shall, at its sole cost and expense, comply with all applicable federal, state, and local laws, ordinances, rules, regulations, and orders (collectively, "Laws") relating to its use and occupancy of the Premises, including, without limitation, environmental laws, zoning ordinances, and the Americans with Disabilities Act. 3.4.3. Prohibited Uses. Tenant shall not use the Premises for any illegal purpose, or in any manner that creates a nuisance, disturbs other tenants, or is hazardous to persons or property. Tenant shall not bring or permit any Hazardous Materials on the Premises, except for those reasonably necessary for the Permitted Use and handled in compliance with all Laws.

3.5. Maintenance and Repairs. 3.5.1. Landlord's Obligations. Landlord shall maintain in good repair and condition the structural components of the Building (e.g., roof, foundation, exterior walls), the Common Areas, and the basic plumbing, electrical, HVAC, and fire suppression systems serving the Building, except to the extent such repairs are necessitated by the acts or omissions of Tenant or its agents, employees, or invitees. 3.5.2. Tenant's Obligations. Tenant shall, at its sole cost and expense, maintain the interior of the Premises in good order, condition, and repair, including all non-structural components, interior walls, floors, ceilings, fixtures, and all systems exclusively serving the Premises. Tenant shall also be responsible for the cost of any repairs to the Building or Common Areas necessitated by the acts or omissions of Tenant or its agents, employees, or invitees.

3.6. Alterations. 3.6.1. General. Tenant shall not make any alterations, additions, or improvements to the Premises ("Alterations") without the prior written consent of Landlord, which consent may be withheld in Landlord's sole discretion for structural Alterations and shall not be unreasonably withheld, conditioned, or delayed for non-structural Alterations. 3.6.2. Conditions. Any approved Alterations shall be performed by licensed contractors approved by Landlord, in a good and workmanlike manner, in compliance with all Laws, and at Tenant's sole cost and expense. 3.6.3. Removal. Unless otherwise agreed by Landlord in writing, all Alterations shall become the property of Landlord upon installation, except for Tenant's trade fixtures and movable equipment. Landlord may, at its option, require Tenant to remove any Alterations (other than Tenant's trade fixtures) at the expiration or earlier termination of this Agreement and restore the Premises to its original condition, all at Tenant's sole cost.

3.7. Utilities and Services. 3.7.1. Tenant's Responsibility. Tenant shall be solely responsible for arranging and paying directly for all utilities and services consumed within the Premises, including, but not limited to, electricity, gas, water, sewer, internet, and telecommunications, unless otherwise expressly provided herein. 3.7.2. Landlord's Responsibility. Landlord shall provide and pay for utilities and services to the Common Areas. In cases where utilities are not separately metered for the Premises, Tenant shall pay its proportionate share of such utility costs as Additional Rent, calculated based on the ratio of the Premises' square footage to the total leasable area of the Building.

3.8. Insurance. 3.8.1. Tenant's Insurance. Tenant shall, at its sole cost and expense, maintain throughout the Term: (a) Commercial General Liability Insurance with a minimum combined single limit of [Dollar Amount] ($[Dollar Amount]) per occurrence and [Dollar Amount] ($[Dollar Amount]) in the aggregate, naming Landlord and any parties designated by Landlord as additional insureds. (b) Property Insurance covering Tenant's personal property, trade fixtures, and Alterations located in the Premises against loss or damage by fire and other perils normally covered by an "all-risk" policy, in an amount not less than the full replacement cost. (c) Workers' Compensation Insurance as required by Law. 3.8.2. Landlord's Insurance. Landlord shall maintain, at its expense, property insurance covering the Building (excluding Tenant's property) and Commercial General Liability Insurance for the Common Areas. The cost of Landlord's insurance related to the Building and Property may be passed through to Tenant as Additional Rent. 3.8.3. Waiver of Subrogation. Landlord and Tenant each waive any and all rights of recovery against the other for loss or damage to their respective property covered by insurance policies required or permitted under this Agreement.

3.9. Indemnification. 3.9.1. Tenant's Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord, its agents, employees, and invitees, from and against any and all claims, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with: (a) Tenant's use or occupancy of the Premises; (b) any breach by Tenant of this Agreement; (c) any acts or omissions of Tenant or its agents, employees, contractors, or invitees; or (d) any Alterations made by Tenant. 3.9.2. Landlord's Indemnity. Landlord shall indemnify, defend, and hold harmless Tenant, its agents, employees, and invitees, from and against any and all claims, liabilities, damages, losses, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with Landlord's gross negligence or willful misconduct in the performance of its obligations under this Agreement.

3.10. Subleasing and Assignment. Tenant shall not assign this Agreement, or sublease all or any part of the Premises, or permit the use or occupancy of the Premises by any party other than Tenant, without the prior express written consent of Landlord, which consent may be withheld in Landlord's sole discretion. Any attempted assignment, sublease, or transfer without such consent shall be null and void and constitute an Event of Default.

3.11. Damage or Destruction. 3.11.1. Partial Damage. If the Premises or Building are partially damaged by fire or other casualty, but not rendered untenantable, Landlord shall, with reasonable diligence, repair the damage. If the damage renders the Premises wholly or partially untenantable, Base Rent shall be abated proportionally during the period of untenantability. 3.11.2. Substantial Damage. If the Premises or Building are substantially damaged or rendered wholly untenantable, Landlord shall have the option to repair or reconstruct the Premises/Building within [Number] ([Number]) days of the casualty or to terminate this Agreement by written notice to Tenant. If Landlord elects to terminate, this Agreement shall terminate as of the date of damage. If Landlord elects to repair, it shall do so with reasonable diligence, and Base Rent shall be abated during the period of untenantability.

3.12. Condemnation. 3.12.1. Total Taking. If the entire Premises are taken by eminent domain or condemnation, this Agreement shall terminate as of the date of the taking. 3.12.2. Partial Taking. If a portion of the Premises is taken, and the remaining portion is not reasonably suitable for Tenant's continued use, Tenant may terminate this Agreement within [Number] ([Number]) days of notice of such taking. If the Agreement is not terminated, the Base Rent shall be equitably abated, and Landlord shall make reasonable efforts to restore the remaining Premises. 3.12.3. Awards. All compensation awarded for any taking of the Premises or Building shall belong to Landlord. Tenant shall have no claim to any part of a condemnation award, except for any separate award made to Tenant for its relocation expenses or the value of its trade fixtures, if separately awarded.

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4. Default, Termination, and Remedies

4.1. Events of Default by Tenant. The occurrence of any of the following shall constitute an "Event of Default" by Tenant under this Agreement: 4.1.1. Monetary Default. Failure to pay any installment of Base Rent, Additional Rent, or any other sum due to Landlord under this Agreement, if such failure continues for [Number] ([Number]) business days after written notice from Landlord to Tenant. 4.1.2. Non-Monetary Default. Failure to perform any other term, covenant, or condition of this Agreement (other than payment of money) if such failure continues for [Number] ([Number]) business days after written notice from Landlord to Tenant; provided, however, that if such default cannot reasonably be cured within such [Number] business day period, Tenant shall not be in default if Tenant commences to cure within such period and thereafter diligently and continuously prosecutes the cure to completion within a reasonable time, not to exceed [Number] ([Number]) additional days. 4.1.3. Insolvency/Bankruptcy. The filing of a petition by or against Tenant under any chapter of the U.S. Bankruptcy Code or similar insolvency laws, or the making of any assignment for the benefit of creditors, or the appointment of a receiver, trustee, or similar official over all or substantially all of Tenant's assets, unless such petition or appointment is dismissed or vacated within [Number] ([Number]) days. 4.1.4. Abandonment. Abandonment of the Premises by Tenant.

4.2. Landlord's Remedies. Upon the occurrence of any Event of Default by Tenant, Landlord shall have the following remedies, in addition to all other rights and remedies available at law or in equity, all of which shall be cumulative and not mutually exclusive: 4.2.1. Termination of Lease. Landlord may terminate this Agreement by giving written notice to Tenant. Upon such termination, Landlord may recover from Tenant: (a) The worth at the time of award of any unpaid rent that had been earned at the time of termination. (b) The worth at the time of award of the amount by which the unpaid rent that would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided. (c) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided. (d) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or that in the ordinary course of things would be likely to result therefrom, including, without limitation, costs of recovering possession, costs of reletting, remodeling costs, attorneys’ fees, and brokerage commissions. 4.2.2. Re-entry and Repossession. Landlord may re-enter the Premises and take possession thereof, by force or otherwise, without terminating this Agreement, and without liability for trespass or damages. Landlord may relet the Premises on such terms and conditions as Landlord deems advisable, and Tenant shall remain liable for any deficiency between the rent due under this Agreement and the rent collected from any reletting, after deducting Landlord's reletting expenses. 4.2.3. Cure by Landlord. If Tenant fails to perform any of its non-monetary obligations under this Agreement after applicable notice and cure periods, Landlord may, but shall not be obligated to, perform such obligation on Tenant's behalf. All costs incurred by Landlord in performing such obligation shall be reimbursed by Tenant to Landlord upon demand, together with interest at the maximum legal rate from the date incurred until paid.

4.3. Tenant's Remedies. In the event of a material breach by Landlord of any of its obligations under this Agreement, Tenant shall provide written notice to Landlord specifying the nature of the breach. If Landlord fails to cure such breach within [Number] ([Number]) business days after receipt of such notice (or such longer period as may be reasonably required if the breach cannot be cured within [Number] business days, provided Landlord commences cure within said [Number] business days and diligently prosecutes the cure to completion), Tenant may pursue any remedies available at law or in equity, provided that Tenant's remedies shall generally be limited to injunctive relief, specific performance, or an action for damages, and Tenant shall not have the right to terminate this Agreement or withhold rent unless expressly permitted by applicable law.

4.4. Holdover. If Tenant remains in possession of the Premises after the Expiration Date or earlier termination of this Agreement without Landlord's express written consent, Tenant shall be deemed a holdover tenant. During any holdover period, Tenant shall pay to Landlord [Percentage, e.g., one hundred fifty percent (150%)] of the Total Rent applicable immediately prior to the holdover, computed on a daily basis. Such holdover shall not be deemed to extend the Term or renew this Agreement, and Tenant shall indemnify Landlord against all damages, including consequential damages, incurred by Landlord as a result of such holdover.

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5. Boilerplate Legal Provisions

5.1. Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, shall be found to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is found to be invalid or unenforceable, shall not be affected thereby and shall continue in full force and effect.

5.2. Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement between Landlord and Tenant with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, negotiations, and discussions, whether written or oral. No oral statements or representations made by either party shall be binding upon the other.

5.3. Force Majeure. Neither Landlord nor Tenant shall be liable for any failure or delay in performing its obligations under this Agreement (except for the payment of money) if such failure or delay is due to an event of Force Majeure, which shall mean acts of God, war, terrorism, riot, civil commotion, embargo, fire, earthquake, flood, epidemic, pandemic, exceptionally severe weather, or any other cause beyond the reasonable control of the affected party. The party affected by Force Majeure shall promptly notify the other party and use commercially reasonable efforts to mitigate the effects of such event.

5.4. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of [Jurisdiction, e.g., California], without regard to its conflict of laws principles.

5.5. Dispute Resolution. 5.5.1. Negotiation. The parties agree to attempt to resolve any dispute, claim, or controversy arising out of or relating to this Agreement through good faith negotiation between senior management. 5.5.2. Mediation. If the dispute cannot be resolved through negotiation within [Number] ([Number]) days, the parties agree to participate in non-binding mediation administered by [Name of Arbitration/Mediation Association, e.g., Judicial Arbitration and Mediation Services (JAMS)] or [Name of Arbitration/Mediation Association, e.g., American Arbitration Association (AAA)] in [City, State], with each party bearing its own costs and an equal share of the mediator's fees. 5.5.3. Arbitration. Any dispute, claim, or controversy arising out of or relating to this Agreement, including the breach, termination, enforcement, interpretation, or validity thereof, that cannot be resolved through negotiation or mediation, shall be finally settled by binding arbitration administered by [Name of Arbitration/Mediation Association, e.g., JAMS] or [Name of Arbitration/Mediation Association, e.g., AAA] in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall take place in [City, State], before a single arbitrator. The arbitrator shall be a retired judge or an attorney with at least [Number] years of experience in commercial real estate law. 5.5.4. Litigation (Alternative to Arbitration, if Arbitration is not chosen or fails). If the parties do not agree to arbitration or if a dispute is not subject to arbitration under applicable law, any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in [County, State, e.g., Los Angeles County, California], and the parties hereby consent to the personal jurisdiction and venue of such courts.

5.6. Waiver. No waiver of any breach of any provision of this Agreement shall be effective unless it is in writing and signed by the waiving party. No waiver of any breach shall be deemed a waiver of any subsequent breach of the same or any other provision hereof.

5.7. Notices. All notices, demands, or other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when: (a) delivered personally; (b) sent by recognized overnight courier service (e.g., FedEx, UPS) with tracking providing proof of delivery; (c) sent by certified or registered mail, return receipt requested, postage prepaid; or (d) sent by email with confirmation of receipt (but not solely by automated response), to the addresses set forth in the Preamble of this Agreement, or to such other address as either party may designate by notice in accordance with this Section.

5.8. Amendments. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by duly authorized representatives of both Landlord and Tenant.

5.9. Time of Essence. Time is of the essence for the performance of all obligations under this Agreement.

5.10. Attorneys' Fees. In the event of any litigation, arbitration, or other legal proceeding arising out of or relating to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs and expenses incurred, including, without limitation, reasonable attorneys' fees and expert witness fees.

5.11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

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6. Formal Execution Block

IN WITNESS WHEREOF, the parties hereto have executed this Commercial Lease Agreement as of the Effective Date.

LANDLORD:

[Landlord Legal Entity Name]

By: ___________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date]

TENANT:

[Tenant Legal Entity Name]

By: ___________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date]