Minnesota Commercial Lease Agreement Template

MINNESOTA COMMERCIAL LEASE AGREEMENT TEMPLATE

1. DOCUMENT PREAMBLE & RECITALS

THIS COMMERCIAL LEASE AGREEMENT (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and between the following parties:

LANDLORD: [Landlord Legal Name], a [State of Organization and Entity Type, e.g., Minnesota corporation / limited liability company], having its principal place of business at [Landlord Address] ("Landlord").

TENANT: [Tenant Legal Name], a [State of Organization and Entity Type, e.g., Minnesota corporation / limited liability company], having its principal place of business at [Tenant Address] ("Tenant").

RECITALS

WHEREAS, Landlord is the fee simple owner of certain real property located in the County of [County Name], State of Minnesota, commonly known as [Building/Complex Name] and municipally addressed as [Street Address, City, Minnesota, Zip Code] (the "Building"); and

WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, the Premises (as defined herein) situated within the Building, upon and subject to the terms, covenants, conditions, and provisions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants, obligations, and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms shall have the meanings assigned to them in this Section 2:

1. "Additional Rent" means all sums of money, other than Base Rent, that shall become due and payable by Tenant to Landlord pursuant to the provisions of this Agreement, including, without limitation, Operating Costs, Real Estate Taxes, utilities, and late charges.
2. "Base Rent" means the fixed monthly or annual monetary consideration payable by Tenant to Landlord for the use and occupancy of the Premises, as set forth in Section 3.2.
3. "Commencement Date" means [Date], subject to adjustment as provided in Section 3.1.
4. "Common Areas" means all areas and facilities within the Building and the real property upon which it is situated that are provided and designated by Landlord from time to time for the general, non-exclusive use, convenience, and benefit of Tenant and other tenants of the Building, including lobbies, hallways, elevators, stairwells, parking lots, sidewalks, and landscaped areas.
5. "Default" means any breach, failure, or omission by either party to observe, perform, or comply with any covenant, condition, agreement, or obligation imposed upon such party under this Agreement after the expiration of any applicable notice and cure period.
6. "Expiration Date" means [Date], unless this Agreement is sooner terminated in accordance with the provisions hereof.
7. "Force Majeure" means acts of God, strikes, lockouts, labor disputes, acts of public enemies, wars, blockades, insurrections, riots, epidemics, pandemics, lightning, earthquakes, fires, storms, floods, washouts, civil disturbances, explosion, inability to obtain materials, supplies, or labor due to governmental restrictions or shortages, or any other cause, whether of the kind herein enumerated or otherwise, that is not within the control of the party claiming suspension and that by the exercise of due diligence such party is unable to prevent or overcome.
8. "HVAC System" means the heating, ventilation, and air conditioning systems servicing the Premises and/or the Building, as applicable.
9. "Landlord's Work" means any improvements, alterations, or repairs required to be performed by Landlord prior to the Commencement Date pursuant to [Exhibit C / Work Letter].
10. "Lease Year" means each consecutive twelve (12) month period during the Term, commencing on the Commencement Date (or the first day of the calendar month following the Commencement Date, if so elected by Landlord) and each anniversary thereof.
11. "Operating Costs" means all reasonable and necessary costs and expenses incurred by Landlord in the operation, maintenance, management, and repair of the Building and Common Areas, calculated in accordance with generally accepted accounting principles (GAAP), consistently applied, as further detailed in Section 3.4.
12. "Permitted Use" means [Specific Business Activities, e.g., general office use, professional services, light warehousing] and no other purpose whatsoever without Landlord's prior written consent.
13. "Premises" means that certain rentable area located on the [Floor Number, e.g., 3rd] floor of the Building, designated as Suite [Suite Number], containing approximately [Square Footage] rentable square feet, as shown cross-hatched on the floor plan attached hereto as [Exhibit A].
14. "Real Estate Taxes" means all real property taxes, general and special assessments, transit taxes, leasehold taxes, and any other taxes, levies, or charges imposed by any governmental authority upon or with respect to the Building, the land upon which it stands, and Landlord's personal property used in connection therewith.
15. "Security Deposit" means the sum of [Dollar Amount ($0.00)] deposited by Tenant with Landlord pursuant to Section 3.5.
16. "Term" means the initial term of this Agreement, commencing on the Commencement Date and expiring on the Expiration Date, plus any properly exercised renewal or extension terms.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Grant of Lease and Term

Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, for the Term, subject to all terms, covenants, and conditions of this Agreement. The Term shall commence on the Commencement Date and shall end on the Expiration Date. If Landlord is unable to deliver possession of the Premises to Tenant on or before the scheduled Commencement Date due to the holdover of a prior tenant or because Landlord's Work is not substantially complete, this Agreement shall not be void or voidable, nor shall Landlord be liable to Tenant for any resulting loss or damage; provided, however, that the Commencement Date and the obligation to pay Base Rent shall be abated until Landlord delivers possession of the Premises to Tenant in the condition required hereunder.

3.2 Base Rent

Tenant shall pay to Landlord, without notice, demand, deduction, or set-off, the Base Rent in lawful money of the United States. Base Rent shall be payable in monthly installments in the amount of [Dollar Amount ($0.00)], due and payable on or before the first (1st) day of each and every calendar month during the Term. If the Commencement Date falls on a day other than the first day of a calendar month, Base Rent for such fractional month shall be prorated on a per diem basis and paid on the Commencement Date.

3.3 Additional Rent and Operating Costs

1. Pass-Through of Operating Costs: Commencing on the Commencement Date, Tenant shall pay to Landlord as Additional Rent Tenant's Pro Rata Share ([Percentage]%, calculated as the ratio of the rentable square footage of the Premises to the total rentable square footage of the Building) of the Operating Costs of the Building.
2. Estimate and Reconciliation: Landlord shall provide Tenant with an annual good-faith estimate of Operating Costs and Real Estate Taxes for each calendar year. Tenant shall pay one-twelfth (1/12th) of such estimated amount monthly, concurrently with the payment of Base Rent. Within one hundred twenty (120) days following the close of each calendar year, Landlord shall furnish to Tenant a statement of actual Operating Costs and Real Estate Taxes for the preceding year. If the actual costs exceed the estimated payments made, Tenant shall pay the deficiency to Landlord within thirty (30) days of receipt of the statement. If the estimated payments exceed the actual costs, Landlord shall credit the overpayment against Tenant's next falling due Additional Rent installments or, if the Term has expired, refund the same directly to Tenant.

3.4 Security Deposit

Concurrently with the execution of this Agreement, Tenant shall deposit with Landlord the Security Deposit as security for the faithful performance and observance by Tenant of all the terms, covenants, and conditions of this Agreement. Landlord may apply all or part of the Security Deposit to cure any Default of Tenant or to compensate Landlord for any loss or damage sustained by Landlord due to Tenant's Default. If Landlord applies any portion of the Security Deposit, Tenant shall, within ten (10) business days after written demand, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. The Security Deposit shall be held by Landlord without liability for interest and may be commingled with Landlord's other funds, unless otherwise required by Minnesota law.

3.5 Use and Occupancy

Tenant shall occupy and use the Premises solely for the Permitted Use and for no other purpose. Tenant shall not use, occupy, or permit the Premises to be used or occupied in any manner that:

1. Violates any certificate of occupancy for the Premises or the Building;
2. Causes, or is reasonably likely to cause, structural injury to the Building or any part thereof;
3. Constitutes a public or private nuisance or waste;
4. Violates any federal, state, or local law, ordinance, rule, or regulation, including environmental laws; or
5. Voids or increases the rate of any insurance policy maintained by Landlord with respect to the Building.

3.6 Compliance with Laws

Tenant shall, at its sole cost and expense, promptly comply with all applicable federal, state, county, and municipal laws, ordinances, rules, regulations, and orders of any governmental authority having jurisdiction over the Premises, including the Americans with Disabilities Act (ADA), to the extent such compliance is triggered by Tenant's particular use of the Premises or alterations performed by Tenant. Landlord warrants that the Building core and Common Areas comply with applicable laws as of the Commencement Date, except as to alterations or installations performed by or on behalf of Tenant.

3.7 Maintenance, Repairs, and Alterations

1. Landlord's Obligations: Landlord shall maintain, repair, and replace the structural elements of the Building, the roof, foundation, exterior walls, and the mechanical, electrical, plumbing, and HVAC systems serving the Building in a first-class operational condition, except to the extent that such maintenance or repair is required due to the negligence or willful misconduct of Tenant, its agents, employees, or invitees.
2. Tenant's Obligations: Tenant shall, at its sole cost and expense, keep and maintain the interior of the Premises (including non-structural walls, floors, ceilings, windows, and doors) in a clean, sanitary, and good condition and repair.
3. Alterations: Tenant shall not make any structural alterations, additions, or improvements to the Premises without Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. All alterations, additions, and improvements made by Tenant shall, upon installation, become the property of Landlord and shall remain upon and be surrendered with the Premises at the expiration or termination of this Agreement, unless Landlord elects by written notice to Tenant to require Tenant to remove the same at Tenant's sole expense.

3.8 Insurance and Indemnity

1. Tenant's Insurance: Tenant shall, at its sole cost and expense, maintain throughout the Term: (a) Commercial General Liability Insurance insuring Landlord and Tenant against liability for bodily injury, property damage, and personal injury arising out of the use, occupancy, or maintenance of the Premises, with a combined single limit of not less than [Dollar Amount, e.g., $2,000,000] per occurrence and [Dollar Amount, e.g., $4,000,000] general aggregate; (b) All-Risk Property/Casualty Insurance covering all trade fixtures, equipment, inventory, and leasehold improvements installed by Tenant; and (c) statutory Workers' Compensation insurance and Employer's Liability insurance.
2. Indemnification: Tenant shall defend, indemnify, and hold harmless Landlord, its agents, property managers, partners, and employees from and against any and all claims, losses, liabilities, costs, damages, and expenses (including reasonable attorneys' fees) arising out of or resulting from: (a) the use or occupancy of the Premises or Building by Tenant or its invitees; (b) any negligent or wrongful act or omission of Tenant, its agents, employees, or contractors; or (c) any breach or default by Tenant in the performance of its obligations under this Agreement.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

The occurrence of any one or more of the following events shall constitute an "Event of Default" by Tenant under this Agreement:

1. Failure by Tenant to pay any installment of Base Rent, Additional Rent, or any other monetary obligation payable by Tenant hereunder within five (5) business days after the same is due;
2. Failure by Tenant to observe, perform, or comply with any other term, covenant, or condition of this Agreement (other than the payment of money) for thirty (30) business days after written notice from Landlord specifying such failure; provided, however, that if such failure cannot reasonably be cured within thirty (30) business days, Tenant shall not be in Default if Tenant commences to cure such failure within said period and thereafter diligently and continuously prosecutes such cure to completion within a maximum of ninety (90) days;
3. The making by Tenant of any general assignment or general arrangement for the benefit of creditors;
4. The filing by or against Tenant of a petition to have Tenant adjudicated a bankrupt or of a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days);
5. The appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Agreement; or
6. The abandonment or vacation of the Premises by Tenant for a period exceeding thirty (30) consecutive days.

4.2 Landlord's Remedies

upon the occurrence of any Event of Default, Landlord shall have the right, at its election, to pursue any one or more of the following remedies without notice or demand (except as expressly provided herein):

1. Termination of Agreement: Terminate this Agreement and Tenant's right to possession of the Premises, in which event Landlord may recover from Tenant all damages incurred by Landlord as a result of Tenant's Default, including the worth at the time of award of the amount by which the unpaid Base Rent and Additional Rent for the balance of the Term exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided.
2. Continuation of Agreement: Terminate Tenant's right to possession of the Premises without terminating this Agreement, in which event Landlord may re-let the Premises or any part thereof for the account of Tenant. Tenant shall remain liable for any deficiency between the rent reserved under this Agreement and the net proceeds of any re-letting.
3. Self-Help and Cure: Cure such Event of Default on behalf of Tenant, and any reasonable amount expended by Landlord in so doing, together with interest thereon at the maximum legal rate, shall be immediately due and payable by Tenant to Landlord as Additional Rent.
4. Statutory Remedies: Exercise any other remedy available to Landlord at law or in equity under the laws of the State of Minnesota.

4.3 Late Charges and Interest

If Tenant fails to pay any installment of Base Rent or Additional Rent within five (5) days of the date when due, Tenant shall pay to Landlord a late charge equal to [Percentage, e.g., 5%] of the overdue amount to cover administrative expenses. In addition, any overdue sums shall bear interest from the date due until paid at the rate of [Interest Rate, e.g., 1.5%] per month or the maximum rate permitted by Minnesota law, whichever is less.

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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, to any extent, 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 held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

5.2 Entire Agreement

This Agreement, together with any Exhibits and Addenda attached hereto, constitutes the entire agreement between Landlord and Tenant respecting the subject matter hereof and supersedes all prior negotiations, understandings, representations, and agreements, whether oral or written, between the parties. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties.

5.3 Force Majeure

Whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, the party obligated to take such action shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to events of Force Majeure; provided, however, that this Section 5.3 shall not excuse Tenant from the timely payment of Base Rent, Additional Rent, or any other monetary obligations required under this Agreement.

5.4 Governing Law and Venue

This Agreement shall be construed, interpreted, enforced, and governed by and in accordance with the substantive laws of the State of Minnesota, without regard to its conflict of laws principles. Any legal action, proceeding, or arbitration arising out of or relating to this Agreement shall be instituted and litigated exclusively in the state district court located in [County Name] County, Minnesota, or the United States District Court for the District of Minnesota, and each party irrevocably submits to the exclusive personal jurisdiction of such courts.

5.5 Dispute Resolution

In the event of any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof, the parties agree to first attempt to resolve the matter through good-faith negotiation. If the dispute is not resolved through negotiation within thirty (30) days after written notice of dispute is delivered by one party to the other, the parties may, by mutual agreement, submit the matter to binding arbitration administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules, with the place of arbitration being [City, Minnesota].

5.6 Notices

Any notice, demand, request, consent, or approval that either party may or is required to give to the other under this Agreement shall be in writing and shall be deemed duly given: (a) upon personal delivery; (b) on the following business day if sent by a nationally recognized overnight courier service providing proof of delivery; or (c) upon transmission if sent by electronic mail (with confirmed delivery receipt), provided a copy is dispatched concurrently by certified mail, return receipt requested, addressed to the respective party at the addresses set forth in the Preamble or to such other address as designated in writing.

5.7 Waiver of Jury Trial

LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE PREMISES, OR TENANT'S USE AND OCCUPANCY THEREOF.

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, Landlord and Tenant have executed this Commercial Lease Agreement under seal as of the Effective Date first written above.

LANDLORD:

[Landlord Legal Name]

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

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TENANT:

[Tenant Legal Name]

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