It is wise for landlords to have a lease agreement template in order to readily produce commercial lease contracts. A commercial lease agreement is a binding written document that expresses the contract between a property owner and tenant. Included in the lease agreement are the conditions, obligations and regulations that both the owner and tenant are to abide by. The lease template will need to be modified for each contract; especially is the there are varying amounts of rent obligations and clauses specific to the agreement.
Commercial lease agreements outline the specifics of the property rental contract and are difficult to have in standard form. A lease template acts as the skeleton and will streamline the process of preparing a lease by including standard information. The property owner’s information should be included in the lease agreement template because that information is consistent. Once both the tenant and owner or owner representative signs the lease agreement, the contract becomes legally binding.
There are several elements that should be included in a commercial lease agreement. Both the tenant and property owner’s name should be spelled correctly on the agreement. The property address should be identified on the lease agreement as well. If more than one property address is being leased, there can be a lease agreement for each address or the two locations outlined in one agreement.
The contract must also list the dates when the contract starts and terminates. The date the contract starts may not be the day the tenant moves in to the property. The termination date is the date when the tenant will vacate the property. One of the most important details of a commercial lease agreement is the determined amount of rent. The rent amount and dates due must be outlined. If a rent deposit has been paid the payments date and amount need to also be listed on the agreement.
The length of the agreement can be for whatever length of time the parties agree upon. Normally the owner has a preset lease term and the term can vary. A lease term can be a period of one, two or ever five years. Oftentimes, tenants will select a longer lease period if the terms of the lease are favorable. There are situations when a tenant and landlord will agree to a short term lease. A short term lease typically has a duration of a year or less.
The interval or rent payment is a vital component of the commercial lease agreement. Since commercial rental amounts are typically determined according to rental area calculations, the amount of space rented should be included. Ideally the rental amount should be the sum of the total square feet of the area.
Two terms that can impact the information included in a commercial lease agreement template are the use clauses and exclusivity clauses. The use clause will explain how the property is to be used. The exclusivity clause explains whether there will be exclusive rights to the space or whether other businesses or similar services with operate in the same space. These clauses are significant portions of the commercial lease agreement; it is not in the best interest of property owners to have competing businesses in one space. The success and survival of the business renting the commercial space is beneficial for all.
It is important that both the lessor and lessee fully understand the terms of the contract. The information included in the lease agreement template should be read carefully and tenants should seek clarification if there is anything outline in the document is not understood. Not all commercial tenants have a real estate lawyer to review lease contracts so the contract details should be stately as simply as possible.
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