Commercial lease agreement template

A well-drafted commercial lease agreement helps avoid misunderstandings and disputes by clearly defining the rights and obligations of both the landlord and the tenant. 

In this guide we’ll explore what a commercial lease agreement is, its purpose, who manages them, and how to automate the process for efficiency.

What is a commercial lease agreement?

A commercial lease agreement is a legally binding contract between a landlord and a tenant, detailing the terms under which the tenant rents a commercial property. Unlike residential leases, commercial leases cover properties used for business purposes, such as offices, retail spaces, or warehouses.

These agreements outline key aspects of the tenancy, including the duration of the lease, the amount of rent, the responsibilities of each party, and any specific terms related to the use of the property. 

What is the purpose of a commercial lease agreement?

The primary purpose of a commercial lease agreement is to establish a clear, enforceable understanding between the landlord and the tenant. Here are some key functions of a commercial lease agreement:

• Defining terms and conditions: It outlines the terms of the lease, including the lease duration, rent amount, payment schedules, and lease renewal options.
• Assigning responsibilities: It specifies the maintenance responsibilities of each party, including who is responsible for repairs and utilities.
• Regulating use: It defines how the tenant can use the property, ensuring it is used for appropriate business activities.
• Providing legal protection: It offers legal protection for both parties, ensuring that any disputes can be resolved based on the agreed terms.
• Ensuring compliance: It helps ensure compliance with local laws and regulations by incorporating necessary legal provisions.

Who manages commercial lease agreements?

Management of commercial lease agreements typically involves multiple stakeholders within a business, including:

• Property owners/landlords: They oversee the leasing process, ensure compliance with the lease terms, and handle property maintenance.
• Tenants: Businesses that lease commercial spaces are responsible for adhering to the lease terms, paying rent on time, and maintaining the property as agreed.
• Legal teams: They write and review commercial lease agreements to make sure they meet strict legal standards and protect the interests of their clients.
• Property managers: They may be hired to manage the property on behalf of the landlord, handling day-to-day operations and tenant relations.
• Real estate agents: They facilitate the leasing process, helping landlords find suitable tenants and negotiating lease terms.

Commercial lease agreement use cases

Commercial lease agreements are essential in various business contexts. Here are some common use cases:

• Retail spaces: Leasing premises for retailers, shops, boutiques, or supermarkets.
• Office spaces: Renting office buildings or suites for corporate operations.
• Industrial properties: Leasing warehouses, factories, or distribution centers for manufacturing and storage.
• Co-working spaces: Agreements for flexible office spaces used by freelancers, startups, and small businesses.
• Healthcare facilities: Renting spaces for clinics, medical offices, or pharmacies.
• Restaurants and cafes: Leasing locations for dining establishments, including special provisions for kitchen facilities and seating areas.

What should a commercial lease agreement template include?

A comprehensive commercial lease agreement template should include the following elements:

• Parties involved: Names and addresses of the landlord and tenant.
• Premises description: Detailed description of the leased property.
• Lease term: Start and end dates, including renewal options.
• Rent details: Amount, payment schedule, late fees, and rent review clauses.
• Security deposit: Amount and conditions for its return.
• Use of premises: Permitted uses and any restrictions.
• Maintenance and repairs: Responsibilities of the landlord and tenant.
• Utilities and services: Allocation of utility costs.
• Insurance requirements: Types and amounts of required insurance.
• Indemnification: Clauses protecting each party from certain liabilities.
• Subletting and assignment: Conditions under which the tenant can sublet or assign the lease.
• Termination clauses: Conditions for early termination and consequences.
• Dispute resolution: Methods for resolving disputes, such as mediation or arbitration.
• Legal compliance: Clauses ensuring adherence to relevant laws and regulations.

How are commercial lease agreement templates usually managed?

Managing commercial lease agreement templates involves several steps to ensure they are up-to-date, compliant, and easily accessible:

Template creation: Legal teams draft contract templates that comply with local laws and reflect the business's requirements.

Approval process: Templates are reviewed and approved by relevant stakeholders, including legal, finance, and property management teams.

Storage: Templates are stored in a centralized repository, making them easily accessible to authorized users.

Version control: Keeping track of different versions of the template to ensure the latest version is used.

Customisation: Templates are tailored for specific leases, adding details like property descriptions and rent amounts.

Distribution: Approved templates are shared with relevant parties, such as real estate agents or property managers.

Challenges of managing commercial lease agreement templates

Managing commercial lease agreement templates can be complex and challenging. Common challenges include:

Keeping templates up-to-date: Ensuring templates reflect current laws and business practices.

Maintaining consistency: Avoiding discrepancies between different versions of the template.

Managing approvals: Coordinating reviews and approvals from multiple stakeholders.

Customizing templates: Tailoring templates for specific leases without introducing errors.

Tracking changes: Keeping track of modifications to templates and lease agreements.

Ensuring compliance: Making sure all lease agreements comply with relevant laws and regulations.

Centralizing storage: Storing templates in a single, easily accessible location.

Automate commercial lease agreements in Juro

Juro’s AI-native contract automation platform addresses these challenges, offering a streamlined solution for managing commercial lease agreements. Here’s how Juro can help:

Self-serve contracts

Empower teams to handle simple leases independently, reducing the legal team's workload.

Accelerated contract workflow

Use AI-driven tools to streamline contract lifecycles, speeding up drafting, negotiation, and approvals.

Centralized contract repository

Store all lease agreements in one secure location, ensuring easy access and better risk management.

Enhanced collaboration

Facilitate seamless collaboration across teams with a single workspace, improving communication and efficiency.

Integration with existing tools

Integrate seamlessly with real estate tools and CRMs like Wise Agent CRM, Zillow, and Real Geeks through Zapier, pulling transaction data directly into contracts.

Automated templates

Use templates with built-in rules and conditions to ensure consistency and compliance. For example, automatically adjust clauses based on property location or contract value.

Mass-signature capability

Enable mass-signing of routine contracts, saving time and effort in managing high volumes of leases.

Data-rich repository

Create contracts as structured data, enabling custom table views and easy sharing across the business.

Automated reminders

Track key contract deadlines and set automated reminders to avoid missed renewals and compliance issues.

AI-driven insights

Gain valuable insights into contract performance, risks, and opportunities, helping you make informed decisions and optimize your contract management processes.

Juro’s AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo. 

‍