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Commercial Lease Agreement

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Commercial Lease Agreement

The above parties have entered into following Commercial Lease Agreement(the "Agreement") regarding the lease of certain real property.

1. The premises

1.1 The premises are located on STREET ADDRESS, ZIP CODE, CITY and together represent XX m2.

1.2 FILL IN ANYTHING ELSE RELATED TO THE PREMISES, E.G. PARKING, ETC.

1.3 The premises shall be used for PURPOSE and shall not, without Landlord's written consent be used for other purposes.

1.4 The Tenant is in every respect responsible for, either within or from the premises, that the activities on the premises are not in violation of public statutes or regulations. The Tenant also undertakes sole responsibility and risk to obtain the necessary government permits to that of the desired use of the premises.

1.5 Tenant shall not undertake or carry on polluting activity on the property or premises. It is assumed that the use of the premises does not cause odor, noise or otherwise any nuisance or inconvenience to property or tenancy other residents or neighbors.

1.6 Tenant shall not, without Landlord's approval, make changes to building character, including changing the layout, and any such changes must in all cases comply with regulatory requirements. The Tenant has a right to make usual installations in on the premises, and duty, after the Landlord reasonably justified instructions, to make installations and refurbishments, when changes occur to satisfy the demands of a public authority on the contractual use of the premises.

2. Tenancy start and end

2.1 The tenancy starts on DATE and lasts until it is terminated in writing by either party with X months' notice for vacating the first in a month.

2.2 On the day of the beginning of the tenancy or at any other agreed time within one month form said time, Landlord and Tenant must together inspect the premises in order to determine any defects that the Landlord must repair. Visible defects in the premises shall be notified to the Landlord within two weeks of the premises beginning.

2.3 Landlord shall prepare a list of defects which are to be sent to the Tenant. Tenant's appeals against the deficiency list must be communicated to the Landlord within 8 days after the defect list has reached the Tenant and Landlord have the right and duty to remedy the defects without delay.

2.4 The Tenant is required to give the Landlord or his representative access to premises within normal working hours to carry out any remedial work.

2.5 When the tenancy is terminated, the Tenant is required, if requested by Landlord, to ensure adequate restoration of the premises at no cost to Landlord.

2.6 The Landlord is entitled to terminate this Agreement X days' notice if the Tenant materially breaches this Agreement, including any house rules or defaults on payments.

3. Rent and deposit

3.1 The annual rent agreed to XX DKK.

3.2 The rent is paid monthly in advance, the first time on DATE, covering the period from DATE to DATE.

3.3 Within X days after the signature of this Agreement, Tenant shall make a deposit equal to X months' rent, and X months on account amount, a total of XX DKK.

3.4 The total sum payable is thus XX DKK, by DATE to Landlord.

3.5 The deposit serves as security for the Tenant's fulfilment of all obligations under this Agreement, including rent payments, the Tenant's implementation of reconstruction works and restoration of such, as well as security for the Tenant's obligations in respect of vacating. The deposit is not remunerated.

3.6 Landlord must indicate where and how the rent payment must be paid.

4. Adjustment of the rent

4.1 The rent shall increase each year per DATE; the first time on DATE, with X % of the previous year's rent.

4.2 Should the property or premises be imposed new or increased taxes and / or fees for tenancy, also such costs due to the property's higher function in property value, can such costs result in an increase to the rent.

5. Water, heat, hot water and electricity supply and common costs

5.1 In addition to the rent, Tenant shall pay a proportionate share of the cost of the property supply of heat and hot water by consumption meter and valve units.

5.2 The Tenant pays an account amount to cover its share of the expenditures expected, payable simultaneously with the rent. The account amount is currently set to XX DKK per month.

5.3 In addition, Tenant shall pay the proportionate share in the property's common expenses and taxes, including for example:

  • All property taxes, including contribution rates, etc.
  • Operating, maintenance and upkeep (including snow removal) of common outdoor areas, including sidewalks, walkways, run areas, courtyards, parking areas and planting.
  • Cost of cleaning and window cleaning of common building areas including stairways and basements.
  • Other operating, cleaning and maintenance expenses relating to joint installations including electricity costs for common lighting and other installations.
  • Expenses for renovation, rental of a container and other waste collection equipment, etc.
  • Preparation of accounting.

5.4 Accounting for the above costs is calculated annually by the end of the fiscal year and distributed to the individual premises compared to the Landlord fixed allocation principles; currently by size. The financial year of common costs is from DATE - DATE.

5.5 The joint costs are allocated to the individual premises for the gross area. The distribution division for operating costs is currently XX / XX.

5.6 The Landlord is entitled to demand reimbursement of all later taxes, fees and charges of any kind that may be imposed, whether these are the result of the increase in property or land value.

6. The premises

6.1 The premises are delivery fully refurbished and in a condition ready to move into.

6.2 Any additional equipment or furniture procurement is done by the Tenant and for the Tenant’s account.

6.3 Defects that by exercising reasonable care should have been discovered by the Tenant at the inspection of the premises, cannot be claimed if Tenant not within 4 weeks after the premises commencement notify the Landlord about these defects. This however should not include installations which under the legislation is not installed or configured correctly, but are still functional (e.g. electrical systems, fans, etc.).

7. Maintenance and change of tenancy

7.1 The internal maintenance of premises is the responsibility of the Tenant.

7.2 The Tenant is obliged to make sure that the Tenant's staff as others who have access to premises, handle this properly and are liable for any damage that such persons may apply to the premises.

7.3 The Property exterior maintenance is the responsibility of the Landlord.

7.4 The Tenant may not without the Landlord's written consent make changes, penetrations or attachment to the property, including floors, walls, ceilings, windows, doors and installations of all kinds. The Landlord may not unreasonably refuse consent to the change.

4.5 Although the Landlord's grants permission, the Landlord may at the premises termination demand that the installations remain in the premises without compensation to Tenant or to be removed and all after repairs shall be borne by the Tenant.

8. Moving out and handing back

8.1 Since the premises is taken over fully refurbished, the Tenant must when vacating deliver premises in the same condition (not included normal wear and tear). Among other things, this means that the premises must be delivered in freshly painted condition and with newly treated floors.

8.2 All keys must at tenancy termination be delivered to the Landlord. If the Tenant does not submit all keys, the Tenant shall pay all costs for re-coding and replacement of locks, including new keys.

8.3 Landlord and Tenant must agree on a time for an inspection for vacating of the premises at the latest of 4 weeks before the Tenant must vacate the premises. Defects, that by exercising reasonable care, should have been discovered by the Landlord cannot be claimed, if the Landlord not within 4 weeks after Tenant’s vacating notify the Tenant that. This does not apply if the Tenant has acted fraudulently.

8.4 The Tenant's obligation to restore the premises must be concluded before the expiry of the tenancy period. Have the Tenant vacated the premises without having fulfilled its renovation obligations under this Agreement, the Landlord has the right to conduct a reconditioning of the premises for the Tenant's expense and demand payment of rent etc. under this Agreement in the refurbishment period.

8.5 Repair work must be performed by VAT-registered and professional parties.

9. Other provisions

9.1 The rent and all other payments under this Agreement, including the deposit, down payment, etc., shall be added VAT at the then-current rate; currently 25%. VAT is an obligation between the parties and must be paid simultaneously with the rent and other amounts provided by this Agreement.

9.2 The Tenant is entitled at his own initiative and own expense to register the Agreement on the property, so that registration shall respect the property registered easements, encumbrances and mortgages. In addition, land registration of Agreement respecting the future of the property so registered mortgages and easement founding declarations (with or without mortgage) on the property.

9.3 If the Agreement is registered, the Tenant must at end of the tenancy for its own expense cancel the Agreement and submit to Landlord a copy of the cancellation endorsement.

9.4 The Parties shall bear their own costs when entering into this Agreement.

Underskriver - Contractbook
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What should be included in a Commercial Lease Agreement?

Whether you need a complex or a simple Commercial Lease Agreement, the following elements should be included as standard to ensure that all parties’ legal interests are met. At Contractbook, we have included these clauses in our free Commercial Lease Agreement template that can be amended as required by our customers. 

  • The premises - the address of the premises are listed here and what purpose the tenant is renting out the premise for. This section states what the tenant can do and cannot do within the premises and when any prior written consent is required from the landlord. 
  • Tenancy start and end - a simple but crucial section, the tenancy start and end date is identified. However, this section also identifies that both parties must carry out an inspection in a set period of time at the start of the tenancy. Additionally, any defects found must be sent to the tenant, and what the landlord is to do to remedy them. When the tenancy is terminated, the tenant is then required to make good on any defects made within the tenancy. 
  • Rent and deposit - how much and when the rent is to be paid is outlined here. Additionally, how the security deposit on the premises is to be used is identified. 
  • Adjustment of the rent - should the landlord wish to increase the rent, how and when is stated in this short clause. 
  • Water, heat, hot water and electricity supply and common costs - who is responsible for paying for these common costs is outlined here. For the most part, they are to fall to the tenant to pay, but how they are paid is also stipulated.  
  • Premises and equipment - the state of the premises is approached in this section and what happens if the tenant finds a defect, but outside of the initial 4 week commencement period. 
  • Maintenance and change of tenancy - states that the tenant must maintain the inside of the premises and give any staff access to the premises. The exterior is the responsibility of the landlord. However, if the tenant wants to change the inside, they must obtain prior written consent. 
  • Moving out and handing back - when the tenant leaves, they must leave it in the same state that it was when they moved in and hand back the keys. If they don’t, they will be liable for the cost of replacing locks. The landlord and tenant must then come to an agreement about when to inspect the premises for the final end of tenancy. 
  • Other provisions - any other key ideas like VAT on top of the rent is required are dealt with in this final section. 

When should I use a Commercial Lease Agreement?

You should use a Commercial Lease Agreement when you need a legally binding document that demands both a lessor and a lessee of the contract to meet the responsibilities outlined within it. They are essential to use to ensure that both parties can confidently enter into the arrangement, knowing that the other side will uphold their end of the agreement. 

As a result, if you are a lessor with any type of commercial property to rent out or lease, you should always use a Commercial Lease Agreement to make sure you are paid on time and have a legal process you can follow if you are not - amongst other key ideas like damage to your property.

If you are a lessee, a Commercial Lease Agreement can protect you from being leased a property or piece of equipment that is faulty in some way. And, if it is faulty, what the lessor has to do to right the situation. 

Why should I use a Commercial Lease Agreement?

You should use a Commercial Lease Agreement so that you know how to divide expenses between a lessor and a lessee amongst all the other responsibilities that are required of a landlord or tenant. Doing so means that both parties are far more likely to uphold their part of the contract, meaning that a relationship forged on trust can be formed. Both parties will know that they can rely on the other to perform their side of the agreement, meaning they can be confident in the terms of the contract being met. 

For the landlord, that will mean they are certain they will achieve their required income. For the tenant, that means they can be confident the landlord will lease out their property in good working order and make good on any discrepancies in accordance with the terms outlined in the agreement.    

Where and how should I use a Commercial Lease Agreement template? 

If you are in need of several Commercial Lease Agreements, or simply want one that you can rely on without having to hire a lawyer, using a template lease agreement for commercial property - or any other type of commercial lease  - can be highly beneficial. Firstly, the whole process is quicker as you can be confident that the template is a reliable one that will meet the legal interests of both sides. Secondly, you can populate the template with data far more easily than if you had to start the contract from scratch. 

Additionally, with our platform, negotiating the terms and collaboration on the contract itself is far less work. All needs and requirements can be captured quickly and dealt with - without the need for a drawn out process that old methods of generating a contract may have created. Our app makes emailing versions or printing out PDFs for storage an obsolete step in the process - which is not only quicker, it is safer too. Our cloud storage solution means that parties can access the contract as and when they need - further making it a reliable document that can become a true asset to both tenant or landlord alike. 

Finally, by making use of our software, you can also gain access to our lease option agreement or our  lease termination agreement - both of which you may need to use if you are a lessor or a lessee. By using our templates again, you can extract data from previous documents automatically, making the process of completing a contract or agreement much faster still. 

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