A commercial lease for any business can be a large expense and commitment for any business. Commercial leases are a lot different from residential leases as they have provisions that could impact your business from an economic standpoint to the practical use of the space.
Below you will see some highlights of what to expect in a commercial lease agreement.
AGREEMENT of Lease made this 28th day of July 2023, by and between 123, LLC (hereinafter “Landlord”) and XYZ, LLC (Hereinafter “Tenant”).
WITNESSETH
That Landlord for and in consideration of the rent reserved, covenants and agreements hereinafter set forth to be kept, observed, and performed by Tenant, has demised and leased, and does hereby demise and let unto Tenant…
1. Description Leased Premises. Landlord does hereby lease and rent unto Tenant, one commercial building…
2. Terms. The term of this Lease shall be for a period of Five (5) years commencing on July 28, 2023…
3. Rental. Tenant agrees to pay to Landlord as rent, the sums as set forth in Schedule “A”…
4. Renewal. At the expiration of the term of this Lease, said Lease may be renewed at the option of the Tenant for two (5) year options on the same terms and conditions of this Lease excluding as to rent…
5. Security Deposit. Upon the execution of this Lease, Tenant shall pay to Landlord the sum of $ 000.00, which may be held by Landlord throughout the term of this Lease…
6. Specific Use. The Tenant may use the Demised Premises for Commercial Uses allowed by Local and State Laws…
7. Personal Property Taxes. Tenant will pay all personal property taxes levied or assessed in respect of the personal property and trade fixtures on the Demised Premises belonging to or used by the Tenant.
8. Real Estate Taxes. Tenant shall pay all real estate taxes assessed against the Demised Premises.
9. Insurance by Landlord. Tenant shall, at his expense, maintain extended fire insurance protection for the Demised Premises.
10. Insurance by Tenant. Tenant shall maintain, at his/her expense, insurance protection for his/her own personal property and his/her leasehold improvements…
11. Utilities - Refuse. Tenant shall, at his/her expense, provide for reasonable electricity used or consumed in/at the Demised Premises…
12. Verification of Expenses. N/A
13. Assignment - Sublease. Tenant shall have the right to sublet the Demised Premises or any part thereof to any person with Landlord’s express written consent, which shall not be unreasonably withheld or delayed…
14. Signs. Tenant may not place any signs on the building or in or on windows or doors without Landlord’s express written consent…
15. Alterations and Improvements. Tenant will not make any interior or exterior improvements, modifications or alterations to the Demised Premises without the prior written approval of the Landlord…
16. Trade Fixtures. All trade fixtures including shelving, light fixtures, and other equipment installed by and at the expense of Tenant shall remain the property of Tenant…
17. Repairs and Maintenance. Tenant shall repair, renovate and maintain at its expense the Demised Premises including interior non-structural portions thereof and plate glass in as good order…
18. Indemnity - Security. Tenant agrees to indemnify and hold harmless the Landlord from and against all claims and demands of whatever nature arising from or caused by any act, omission or negligence of Tenant or of Tenant’s contracts, licensees, invitees, guests, agents, servants or employees…
19. Maintenance of Common Areas - Contribution. Landlord shall cause all common areas in the building of which the Demised Premises are a part, including the walkways and parking lot and to be maintained in good repair and condition…
20. Access. Landlord shall have access to the Demised Premises during reasonable hours for the purpose of insuring compliance with this Lease…
21. Requirements of Law - Insurance Rates. Tenant shall comply with all laws, orders, ordinances and regulations of Federal, State, County and Municipal authorities and with any direction of any public officer or officials pursuant to law, which shall impose any duty, obligations or limitation upon Tenant with respect to the Demised Premises or the use thereof…
22. Insurance. Insofar as and to the extent that the following provision may be effective without invalidating or making it impossible to secure insurance coverage obtainable from responsible insurance companies doing business in Maine, the Landlord and Tenant mutually agree that with respect to any loss which is covered by insurance then being carried by them respectively…
23. Fire Clause. If the Demised Premises or the building in which the Demised Premises are located during the terms of this lease be so destroyed or damaged by fire or other unavoidable casualty as to render the Demised Premises or any portions thereof unfit for occupancy, then the rent herein before reserved…
24. Condemnation. If any portion of the Demised Premises shall be condemned for any public use by any legally constituted authority, then is such event as to said portion of the Demised Premises, this Lease shall terminate from the time when possession it take of such public authority and the rents herein reserved from said portion of the Demised Premises shall be abated as of the date of the surrender of possession is taken by such public authority….
25. Default and Landlord’s Remedies. It is covenanted and agreed that if the Tenant shall neglect or fail to perform or observe any of the covenants, terms, provisions or conditions contained in the Lease on his part to be performed or observed, or if the estate hereby created shall be taken on execution or by other process of law, or if the Tenant shall be declared bankrupt or insolvent according to law…
26. Subordination. This Lease is and shall be subordinate to the lien of any mortgage or mortgages, which are now or may hereafter be placed on the premises of which the Demised Premises are a part…
27. Waiver. Failure of Landlord to complain of any act or omission on the part of the other, no matter how long the same may continue, shall not be deemed to be a waiver by Landlord of any of his rights hereunder…
28. Quiet Enjoyment. So long as Tenant pays the rent and performs the covenants required of if hereunder, Tenant may peacefully hold and enjoy the premises during the term…
29. General. This Lease shall inure to and be binding upon the respective successors, heirs, executors, administrators and assigns of the Landlord and Tenant. This Lease is made in and shall be governed by and construed in accordance with the laws of the State of Maine…
30. Notices. Whenever by the terms of this Lease, notice shall or may be given either to the Landlord or to the Tenant, such notice shall be in writing and shall be sent by registered or certified mail, return receipt requested, postage prepaid to Landlord’s and Tenant’s addresses as set forth above…
31. Late Fee. All rent payments received after the 10th of each month will be subject to a 5% late fee of the total rent.
32. Addendum. See addendum “A” for additional agreements.
IN WITNESS WHEREOF, Landlord and Tenant have caused this lease to be executed in, duplicate under seal the day and year first above written.
SIGNED, SEALED AND DELIVERED, This 28th day of July 2023. Landlord and Tenant signatures…
Tenants today should consider engaging a Commercial Real Estate Agent Broker assist them with the leasing process including market conditions so expectations can be met.
And in most cases, a Real Estate Attorney should also be engaged to review and negotiate some of the terms of the lease agreement depending on the size, scope, and complexity of the lease. <
Larry Eliason, Commercial Broker may be reached by cell: 207-415-2112 or via email: LarryEliasonBCB@gmail.com.
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