Important Terms in a Commerical Lease Form

A commercial lease form is a standard legal document that spells out an agreement between a property owner and a business renter. These forms are very similar to residential leases, but business owners do need to be aware of a few terms that may be contained within. There are some distinct differences in commercial leases that bear close reading and understanding before the contract to rent is finalized.

Standard Inclusions

Like most leases, a commercial lease form should state a number of standard things, such as:

• The names of all parties involved in the lease
• The property address in question
• The length of the lease
• The monthly rent and due date
• Penalties for failure to pay on time

It is well worth taking the time to read over a commercial lease form to check even minor inclusions, such as the due date on the rent. Small errors can lead to big issues down the road, so it pays to make sure that everything is correct before signing.

Important Terms to Watch for

In many cases, a commercial lease form will also delve into a few more specifics than a standard residential contract might. The terms to pay attention for include:

• The use clause – This part of a commercial lease form will spell out what the rented property may be used for. In the case of a business, it is essential that use matches the intended plans for operation.
• Exclusivity – If a commercial lease form is for the rental of a property within a strip mall, for example, this clause may appear. It is essentially a landlord’s promise not to rent another space to the same kind of business. This is most common in retail situations, so it might not appear in all commercial leases.
• Definition of premises – This clause will or should clearly define what is actually being rented under the contract. Going over this is important to ensure that all desired facilities are considered a part of the lease.

Before signing a commercial lease form, business owners should review the contents carefully for desired inclusions and any potential errors. Doing so is vital for protecting rights to operate the desired business on the premises.

Getting Legal Advice

A commercial lease form might be a fairly routine legal document, but it can set the pace for how a business proceeds with its plans. It is a very good idea to have a commercial real estate attorney review the form before it is signed. This can protect both the renter and the property owner from potential oversights in the contract.