A commercial lease agreement is a document that puts forth the clauses of a lease agreement in clear legal terms, the lease being of some specific form that serves commercial purposes. The agreement should be framed in a way such that it is for the benefit of both parties – the lessor as well as the lessee.
The lessor in this type of an agreement is generally a company or business firm while the lessee may be any organization, a unit of the corporate sector or an individual even. The agreement should outline the specificities of the product or service offered as part of the commercial lease and the other related details in an understandable format.
The commercial lease agreement should contain those terms and conditions that comply with the laws of the State and have been approved by the government of the United States of America. It should also express in a clear and understandable manner the conditions under which the agreement may stand cancelled due to “breach of contract” and probable penalties should be mentioned beforehand.
A few things, which are very crucial in designing a commercial lease agreement, include:
- The name and complete identification details of both the lessor and the lessee should necessarily be provided such that there arises no problem regarding their identity later on.
- The term of the lease is one of the most significant portions of the agreement and should be given accurately. The date of commencement as well as termination of the lease and the validity period should be clearly mentioned.
- A commercial lease agreement may involve the leasing of a product or some products in bulk or even some land for the establishment of a commercial sector. The exact specifications of the subject are to be provided. In case of land, the area in standard measurement terms will have to be given and also the corresponding rates.
- Details of all costs incurred, taxes and rents to be paid and the corresponding span should be provided to avoid any confusion.
- The details of the proper and approved form of use, right to improvement and alterations for the same, repairing and maintenance, further leasing the area, etc. should all be included herein. The insurance details and the rights and responsibilities of the lessee must also be mentioned clearly.
- The punishment(s) to be realized due to any damage or destruction caused while the lease is valid should be mentioned and approved of by involved parties before signing the agreement.
A commercial lease agreement is thus an important legal document as it serves as a genuine and complete reference of all lease terms and conditions and all other related aspects to the lease.