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Lease Agreements

Helping Landlords and Tenants Secure Strong Foundations for Their Business

Whether you are leasing a space for your business or renting out commercial property, the lease agreement you sign will set the tone for your entire relationship.

A well-drafted Commercial Lease Agreement is critical to protecting your investment, managing your risks, and ensuring smooth operations.

At Fletcher Barrow, we work with both landlords and tenants to negotiate, draft, and review commercial leases that are clear, enforceable, and tailored to your unique needs.

What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a binding legal contract between a landlord and a business tenant that sets out the terms and conditions under which the tenant can occupy commercial property.

Unlike residential leases, commercial leases are highly customizable and often far more complex.
They address not only rent and maintenance responsibilities but also important issues like renovations, insurance, operating costs, and renewal rights.

Key Elements of a Commercial Lease

Every commercial lease should be tailored to the property, the parties, and the business involved. Common provisions include:

  • Premises Description: Clearly defines the leased space, including any shared areas like lobbies or parking.
  • Term and Renewal Options: Specifies the length of the lease and any rights to renew or extend the agreement.
  • Rent and Additional Costs: Outlines base rent, increases over time, and additional charges like property taxes, insurance, utilities, and maintenance (commonly known as TMI – Taxes, Maintenance, and Insurance).
  • Use of Premises: Limits how the tenant can use the space, protecting both parties from inappropriate activities.
  • Repairs and Maintenance: Details who is responsible for repairs to the interior, exterior, and structural parts of the building.
  • Tenant Improvements (Build-Outs): Addresses what alterations or renovations the tenant is allowed to make and who pays for them.
  • Assignment and Subletting: Governs whether and how the tenant can transfer their lease or sublet the premises to another business.
  • Insurance Requirements: Outlines the types and minimum levels of insurance each party must maintain.
  • Defaults and Remedies: Defines what happens if either party breaches the lease, including termination rights and damage claims.
  • Indemnification Clauses: Protects the landlord from certain liabilities arising out of the tenant’s operations.

Common Types of Commercial Leases

  • Gross Lease: Tenant pays a single fixed amount; landlord covers most property expenses.
  • Net Lease: Tenant pays base rent plus property taxes (Single Net), taxes and insurance (Double Net), or taxes, insurance, and maintenance (Triple Net).
  • Percentage Lease: Tenant pays base rent plus a percentage of business sales, often used in retail settings.
  • Modified Gross Lease: A compromise where the tenant and landlord share certain operating costs.

Choosing the right lease structure is crucial for managing long-term expenses.

Why Legal Advice is Critical

Commercial leases often involve long-term commitments, significant financial investment, and complex risk allocation.

Whether you are a landlord protecting your property, or a tenant investing in your business, getting sound legal advice is essential.

  • Negotiate favorable lease terms,
  • Understand hidden costs and obligations,
  • Identify and address risks before signing,
  • Ensure compliance with municipal zoning, building codes, and licensing,
  • Protect their rights and interests throughout the lease term.

Frequently Asked Questions

How long are commercial leases typically?

Most commercial leases run from three to ten years, but the term can vary widely depending on the property and business needs.

Can a commercial lease be broken early?

Only if the lease specifically allows it (e.g., early termination clauses) or by negotiation with the other party. Otherwise, breaking a lease can expose you to serious legal ramifications.

Who pays for maintenance and repairs?

It depends on the lease structure. In triple net leases, tenants cover most maintenance; in gross leases, landlords cover more. Always review the lease terms carefully.

Should I get a lawyer to review my commercial lease?

Absolutely. Commercial leases are complex and often favor the landlord. Having a lawyer review or negotiate the lease can protect you from costly surprises later.

What happens if my business outgrows the space?

You will need to look at assignment, subletting rights, or negotiating an early termination if possible. Proper lease drafting can give you flexibility options for growth.

Ready to Secure the Right Space for Your Business?

Whether you are negotiating a new lease or renewing an existing one, Fletcher Barrow can help you navigate the complexities with confidence.

Contact Us

Related Practice Areas

Purchase or Sale of a business

Employment Contracts

Non-Disclosure Agreements

Transfer or Sale of Shares

Shareholders’ Agreement

Commercial Real Estate