Commercial Lease Agreement Template (United States)

What a commercial lease covers

A commercial lease lets a business occupy office, retail, restaurant, flex or light industrial space. Unlike a home lease, it is a negotiated deal between two businesses, and state landlord tenant protections mostly do not apply. That means the written terms decide almost everything: how rent grows, who fixes the roof, what happens if the tenant’s business fails.

When to use one

Use a commercial lease whenever the space will be used mainly for business, including mixed-use buildings where a shop rents the ground floor. If a residential tenant runs a small home business, keep the residential lease and add a home business clause instead.

What to include

• Premises. Suite number, rentable square footage, a floor plan exhibit, shared areas and parking.
• Term and renewal. Commencement, expiration, what happens if the space is not ready, and any renewal options with how renewal rent is set.
• Base rent schedule. A year by year table so increases are clear.
• Operating costs. Whether the lease is gross, modified gross or net; the tenant’s share; how estimates and year-end reconciliation work; what is excluded; and the tenant’s right to review the records.
• Deposit and guaranty. The amount, how it can be used, and any personal or corporate guaranty.
• Permitted use. What the tenant may do in the space, who handles licenses, and any exclusive use right.
• Build-out. The landlord’s work, the tenant improvement allowance, and approval rules for tenant work.
• Maintenance. Which systems each side maintains, especially HVAC.
• Insurance and indemnity. Coverage types and limits, additional insured status, and a mutual waiver for insured property losses.
• Assignment and subletting. Whether consent is needed and whether a change in ownership counts.
• Damage, condemnation, default, holdover and surrender.
• Subordination and estoppel, which lenders will ask for.

State and local rules to check

• Required disclosures. Some states or cities require notices about accessibility inspections, environmental conditions, or energy use.
• Deposits. A few states regulate commercial deposits or how they are held.
• Eviction procedure. The court process for commercial tenants is set by state law, and self-help lockouts are restricted in many states.
• Mitigation. Some states require a landlord to try to relet the space after a tenant leaves early before claiming all remaining rent.
• Zoning and permits for the tenant’s use, which are local.

Common mistakes

• Unclear operating cost terms. Most commercial disputes are about what goes into the shared cost pool. List exclusions and a cap if you agree to one.
• No floor plan or measurement standard. Disagreements about square footage change the rent and the tenant’s share of costs.
• Use clause too narrow or too broad. Too narrow and the tenant cannot adapt its business; too broad and you may breach another tenant’s exclusive.
• Forgetting the guaranty. Without one, a failed small business may leave nothing to collect.
• No holdover rate. Without one, a tenant who overstays may pay the old rent while you lose a new tenant.

Using this lease in TenantLoop

TenantLoop handles commercial units alongside residential ones. Keep your commercial lease as a template, send it for e-signature through Dropbox Sign, post base rent and other charges to the tenant ledger, and give owners statements that come straight from the books.