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Create a Commercial Lease Agreement

A commercial lease is a binding contract that gives a tenant the right to use the landlord’s property for a business or commercial activity in exchange for rent. The agreement should outline the rights and responsibilities of the landlord and tenant during the lease term.

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Learn more about commercial lease agreements

A commercial lease agreement is a binding contract between a property owner and a tenant for the purpose of housing a business or other commercial activity. This lease agreement provides details about rights of the tenant and landlord, plus responsibilities for fulfilling the terms of the contract.

Other names

A commercial lease agreement could be called any the following:
  • Commercial lease
  • Commercial real estate lease
  • Business lease
  • Industrial lease (for industrial spaces)
  • Commercial retail lease agreement (for commercial leases)

Who should use this form?

The property owner or property management company creates a commercial lease agreement. After reviewing the details, both the property manager and the tenant will sign the lease, making it legally binding.

What to include in a commercial lease agreement

A commercial lease agreement should address all the details of the agreement between both parties. This document usually defines the tenant and landlord and states the starting and ending dates for the rental period. This agreement will also specify the approved uses for the space, such as maintaining an office or operating a retail storefront.
Include the monthly rent totals and due dates, plus the penalties for late payment, nonpayment, and rules for occupants. For instance, the landlord might demand that the tenant gain permission before making any changes to the building's structure.
Commercial lease agreements should specify who will pay utilities and who will have responsibility for costs associated with the property's upkeep. The form should tell the tenant how to make requests for repairs and maintenance, and may address issues about subletting. Include an address for submitting rent payments to avoid confusion.
Some leases include a clause that addresses common facilities, too. In a large building, for instance, multiple tenants might share a parking lot, a reception area, or an employee lounge.
The contract must comply with both federal and state laws that concern landlords and tenants.

Next steps

After both parties sign the commercial lease form, each party should keep a copy. Once an official contract exists, the landlord and tenant cannot change the agreement's provisions unless they create and sign a new lease or sign an addendum to the existing lease. Both parties have to sign or add their initials to any document changes.
A commercial lease agreement typically covers a specific time period, such as 1 year or 5 years. After that time, the landlord and tenant can either end the business relationship or sign a new lease.
Important Terms: