How to Write Your Own Commercial Property Lease Agreement

••• Jupiterimages/Polka Dot/Getty Images

Commercial property owners are in a position to make a substantial profit by leasing to a business. To make that profit you must tailor your contract to meet every contingency, as commercial leases aren't bound by the same laws as residential ones. You must consider what business you want to allow on your property, what kind of changes that business can make to showcase its goods, and what your responsibilities as landlord will be throughout the life of the lease. A well-planned lease protects you and your profit margin.

Stipulate the price of the lease. A total price, monthly payment and the down payment, also known as the key money, must all be listed in your commercial lease.

List the size and location of the building in your lease. Include the exact dimensions of the building, along with the size and address of this and any other property — such as land or additional buildings — included in the lease. This information sets the physical boundaries of the lease for your tenant.

Include a list of the physical changes that are allowed in the lease. Painting or adding walls and modifications to the existing landscaping are examples of possible modifications.

Specify a specific time line for the lease. Write down exact dates so that there's no misunderstanding. A commercial lease may range from a few months to several years.

Explain the arbitration process that's required by the lease. Arbitration must be stipulated to handle disputes that could potentially drag out for years in a court setting.

Add a section about the handling of building defects and damage, such as electrical, plumbing and structural problems that may be hazards to life and property. A stipulation requiring these problems be reported to you, the owner, lessens your liability in these matters. Hire qualified professionals to make these repairs as soon as problems arise to further lessen your liability.

List your requirements for the handling of hazardous materials, noise pollution and other possible contaminants. Businesses may deal with these hazards on a daily basis: Without this addition to the lease, you're liable for your tenant's mishandling of such items.

Stipulate extras such as a cleaning service and maintenance in the lease. Ensure your tenant understands whether you'll handle these extras or you require him to do so. Outline your requirements for the regular cleaning and upkeep of the property.

Warnings

  • Always ask an attorney to review or draft every contract and legal document you intend to use when doing business.

References

About the Author

After learning electronics in the U.S. Navy in the 1980s, Danny Donahue spent a lifetime in the construction industry. He has worked with some of the finest construction talent in the Southeastern United States. Donahue has been a freelance writer since 2008, focusing his efforts on his beloved construction projects.

Photo Credits

  • Jupiterimages/Polka Dot/Getty Images