A commercial lease agreement template outlines the terms and conditions of a rental arrangement between a landlord and a tenant for a commercial property.

Commercial Lease Application – Before renting a property to any individual or business entity, landlords highly recommend using a lease application to screen applicants.

By State

1. How to Lease Commercial Rental Property?

2 Options:

2. How to Process Rental Inquiries?

Property owners will know who is seriously interested in renting the Commercial Rental Property by potential Tenants requesting to see the property in person (property showing).

3. How to Screen Tenants?

There are five ways Landlords can screen potential Tenants to see if they are a good fit for the Commercial Rental Property for Lease:

Commercial Lease Application
Copy of Drivers License
EIN (business)
Previous two years of business tax returns (IRS Form 8879-S or IRS Form 1120S)
Previous two years of personal income tax returns (IRS Form 1040).

Screening Services:

Individuals – MySmartMove (TansUnion)

Businesses – Dun & Bradstreet

Commercial Real Estate Definitions

Absorption Rate – The rate at which available commercial space is leased or sold over a specific period, indicating demand in the market.
Anchor Tenant – A major tenant in a commercial development (often a large retail store or grocery chain) that attracts other tenants and drives foot traffic.
Build-to-Suit – A commercial property constructed specifically for a particular tenant’s needs, often under a long-term lease agreement.
CAM (Common Area Maintenance) Charges – Fees paid by tenants in multi-tenant properties to cover expenses related to shared spaces like lobbies, hallways, elevators, parking lots, and landscaping.
Cap Rate (Capitalization Rate) – A measure used to estimate the return on an investment property, calculated by dividing the property’s NOI by its current market value or purchase price.
Commercial Property – Buildings and Land used for profit generation, including office buildings, medical centers, hotels, malls, retail stores, multifamily housing buildings, farmland, warehouses, and garages.
Commercial Lease/Tenancy – Nonresidential tenancy for property by for-profit entities.
Gross Lease – A lease where the landlord pays for most or all property expenses, such as taxes, insurance, and maintenance. The tenant pays a fixed rent amount.
Leasehold Interest – The tenant’s right to use and occupy a commercial property for the term of a lease, distinct from ownership of the land or building.
Net Operating Income (NOI) – A calculation used to analyze real estate investments, representing the total income from a property minus operating expenses (excluding taxes, interest, and depreciation).
REIT (Real Estate Investment Trust) – A company that owns, operates, or finances income-producing real estate and allows individual investors to buy shares and receive dividends.
Sublease – A secondary lease where the original tenant leases part or all of the rented property to another party, typically with the landlord’s consent.
Tenant Improvement (TI) Allowance – Funds provided by a landlord to customize or improve a commercial space to meet a tenant’s specific business requirements.
Triple Net Lease (NNN) – A type of lease agreement where the tenant agrees to pay all property expenses including real estate taxes, insurance, and maintenance, in addition to rent and utilities.
Vacancy Rate – The percentage of all available units in a commercial property or market that are unoccupied at a given time.
Zoning – Legal regulations that dictate how a property can be used (e.g., commercial, industrial, residential) and what kind of structures can be built on it.

Frequently Asked Questions

What is the penalty for breaking a Commercial Lease Agreement?

Commercial Leases do not have early termination rights, so Landlords usually require 3 to 6 months of pre-paid rent plus unamortized costs.

What are outgoings in Commercial Leases?

Operational and maintenance costs.

How much is a Commercial Lease Bond?

2-3% of the policy coverage amount annually. [secuirtybonds.com]

Do Commercial Tenants have the same rights and protections as Residential Tenants?

Unlike Residential Tenants, Commercial Tenants are bound to the statutory rights and protections outlined in the Lease Agreement.

When Does a Commercial Lease Agreement Become Legally Binding?

The Commercial Lease Agreement becomes legally binding when both parties sign the contract and the buyer gets the notice that the seller has accepted the deal. The buyer can get the notice in-person, by phone, and/or email.

Sample Commercial Lease Agreement Template

Sources

Standard Commercial Lease Agreement Checklist

✅ Before Signing Checklist

✅ After Signing Checklist

Immediate Steps:

Exchange signed lease copies between parties

Submit certificate of liability insurance (COI) to landlord

Collect keys, security codes, and building access passes

Initiate utility and internet service activation

First Month Steps:

Begin or complete tenant improvements/buildout

Install signage in compliance with lease and local ordinances

Provide landlord with emergency contacts

Announce business opening and update address records

Commercial Lease Agreement Templates