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Commercial Lease Agreement - CA (Delaware)

Commercial Lease Agreement Instructions:

In the opening paragraph you will identify the parties that are entering into this Lease Agreement, as well as the date that they are signing the Agreement. In the first sentence enter the date that this Lease is being entered into as the day, then the month and Year. Next enter the Landlord’s name, address and phone number, then do the same for the tenant. If there is a Guarantor enter the Guarantor’s name, address and phone number as well.

Summary of Terms:

In this section, you are providing a summary of the basic terms of this agreement, including who the Parties to this agreement, in other words who the Landlord is, the Tenant and Guarantor. You are also identifying the Leased Premises address, as well as the amount of the base rent, the security deposit amount, and what the permitted use of the premises will be, for example, clothing store, restaurant, office, etc.…

Description of Leased Premises:

In this section, you are describing the leased premises in more details, providing the exact address, with any unit number, the square footage of the premises.

In Paragraph 3- you should describe the premises in more detail, include any legal description of the premises that you may have.

In Paragraph 4 – enter the amount of parking spaces the Tenant will have access to on the Premises, if no parking spaces are being provided enter zero in the space.

Lease Term:

Paragraph 5 – Here state the start and end date of this Lease.

Paragraph 6 – If the Tenant will take possession of the premises before the start date of the Lease, enter the date that the Tenant will take such possession.

Lease Intent and Type:

In this section you will identify what type of Lease this is. There are typically three types of leases: a Gross Net Lease, a Modified Gross Net or a Triple Net Lease.

If the Tenant will only be paying the monthly base rent and the Landlord will be responsible for all other expenses, including utilities, taxes, etc.… then this is Gross Net Lease, which is the first option listed in Paragraph 8.

However, if the Tenant is responsible for certain operating expenses, in addition to the monthly Base Rent, then this type of lease is called a Modified Gross Net Lease and is the second option listed here. For this option (Modified Gross Net Lease) we provide you space to enter the exact expenses the Tenant will be responsible for in addition to the Base Rent. Such expenses may include, but are not limited to, utilities maintenance, insurance, cleaning services, security, etc.…

The third option is for a Triple Net Lease, which provides that the Tenant is responsible for all or 100% of all operating costs, expenses, rates, taxes and any other expenses or fees related to the Premises in any way, unless otherwise specified in this Lease, in addition to the Base Rent.

If the type of lease you wish to create does not fall in the above three categories, we have provided you with a forth check box and lines to clearly state what the Lease type will be. Remember to use clear and concise sentences and refer to the parties as the Landlord or the Tenant. 

Paragraph 8 – Enter the lease type that you wish to create. For example, you may enter Gross Net, Modified Gross Net, Triple Net Lease, or any other. The check off the box that describes your lease type.

Rent:

In this section you will enter information about the Base Rent amount, when the rent will be due and where to send the rent, if there is an abatement period. This section also provides for any late fees and charges.

Paragraph 9 – Enter the Base Rent amount here, then state how often it is due. For example, is that Base Rent amount due monthly, bi-weekly, annually, etc.….

Paragraph 11 – Here you will state on which day the Base Rent will be due. For example, is the Base Rent due on the First day of the Month, the 15th day of the month, week, once a year, etc.….

Paragraph 12 – Enter the address where the Tenant should send all lease payments to.

Paragraph 13 – If an abatement period is being provided to the Tenant, enter how many months that is for here. If no abatement period is being provided, enter zero or not applicable here.

Paragraph 15 – Here the Landlord may outline any annual rent increases, as applicable. For the years that are not applicable to your Lease Agreement, enter “n/a.”

Paragraph 16 – Here enter the amount of any late fee that the Tenant will pay for any late payments.

Paragraph 17 – Enter the fee that the Tenant will have to pay if any check is returned by a bank for lack of sufficient funds.

Rent Advances and Security Deposit:

In this section you will state whether there is any Advanced Rent to be paid, as well as what the security deposit is and how it will be handled.

Paragraph 20 – If the Tenant will be giving the Landlord “Advanced Rent” which is the first month’s Base Rent and the last month and does not include the security deposit, then leave this section as is. If no advanced rent is being accepted or taken by the Landlord, then strike this paragraph out and the parties should initial next to the strike out.

Paragraph 21 – State the amount of the security deposit here.

Paragraph 24 – Describes what happens to the security deposit upon termination of the tenancy. In the first blank enter how many days after the end of the tenancy the Landlord has to return the deposit, minus any applicable deductions. Next, enter the address for the tenant to receive the security deposit at. Do not enter the address of the Leased Premises.

Operating Costs:

This section allows the Parties to outline any other operation costs or expenses that the Landlord or Tenant will be responsible for. These are fees or expenses other than what was outlined in the Lease Intent section. These costs may include, but are not limited to: property taxes, improvements or repairs to the building or the Premises, HVAC equipment maintenance and repair, cleaning and janitorial services, servicing of elevators, window cleaning, management fees landscaping and snow removal fee, maintenance of the parking lot, etc.… There are also paragraph specific for utilities.

Paragraph 25 – If the Tenant is responsible for directly paying any vendor or for any operating costs as agreed to, enter those here. If this is not applicable, enter “Not Applicable.”

Paragraph 26 – If the Tenant is responsible for directly paying the Landlord in proportion to its use of any operating costs, describe that here. Be specific as to what amount or percentage of any costs the Tenant is responsible for. If this is not applicable, enter “Not Applicable.”

Paragraph 27 – If the Landlord is responsible for paying for operating costs, state what those are here or if it’s all such costs, state so here as well. If this is not applicable, enter “Not Applicable.”

Paragraph 28 – If the Tenant is responsible for certain utilities or charges, specify what those are in this paragraph. Examples of utilities may include: electricity, natural gas, water, heat, telephone, internet, cable, snow and garbage removal, etc….If this is not applicable, enter “Not Applicable.”

Paragraph 28 – If the Landlord is responsible for certain utilities or charges, specify what those are in this paragraph. Examples of utilities may include: electricity, natural gas, water, heat, telephone, internet, cable, snow and garbage removal, etc.… If this is not applicable, enter “Not Applicable.”

Permitted Use:

In this section you will describe what the Tenant will use the premises for. In addition, if its exclusive to the tenant, with no coemption or otherwise.

Paragraph 29 – Enter that the permitted use of the premises is. For example, restaurant, clothing store, doctor’s office, urgent care, jewelry store, etc.…

Paragraph 31 – Enter the business name that the Tenant will use to operate the business.

Paragraph 32 – If the Landlord agrees that while the Tenant is in good standing, the Landlord will not rent any other space to any business that has a similar business activity as the Tenant, then circle will. If not, circle will not.

Paragraph 33 – Circle whether the Landlord will or will not grant the Tenant exclusive right to conduct their permitted use on the premises.

Guarantor:

If the Landlord is requiring a Guarantor, this section outlines the Guarantor’s responsibilities and obligations.

Option to Renew:

In this Section you will circle whether the Tenant will have the right to renew this lease or not.

Paragraph 40 – Circle whether Tenant will or will not have the right to renew this Lease at the end of the lease term.

Paragraph 41 – The following paragraphs, paragraph number: 41, is only applicable if the Tenant has the right to renew the lease. In Subsection ii: you may outline what terms will change if the Tenant has the option to renew, such as the Base Rent, or expenses.

If this is not applicable, enter “Not Applicable” and the Parties should initial on the margins here.

Option to Purchase:

In this section, you will circle whether the Tenant has the option to purchase the Premises or not.

Paragraph 42 – Clearly circle whether the Tenant will or will not have the option to purchase the Premises. If you circle that the Tenant will have the option to purchase, then Paragraph 43 is applicable and you will need to fill it out.

However, if the Tenant does not have an option to purchase, Paragraph 43 is not applicable and can be X’d out and the parties should initial by the margins agreeing to cross out or strike out that paragraph.

Paragraph 43 – If the Tenant has the option to purchase then the following information must be provided:

Subsection ii – Enter the purchase price for the Premises here.

Subsection iii – Enter the amount of the Option Fee here, if applicable. The option

fee is the amount the Tenant is paying in order to have the option to purchase made available to them. If the Tenant does not exercise its option purchase within that time period, the Tenant no longer has the option to purchase the premises.

Subsection vii – Enter the address where the Tenant should send its notices if it decides to exercise its option to purchase the premises.

Tenant’s Insurance:

Paragraph 49 – Enter the minimum amount of the insurance policy that the Tenant is required to obtain. If the Tenant is not required to obtain insurance, enter zero (0) here.

Default:

This section outlines what happens should the Tenant be in default of this Lease Agreement.

Paragraph 58 – Enter how many days’ notice the Landlord will provide the Tenant in order to cure or fix a default in payment of any money. If the Tenant then fails to pay the amount due, then the Landlord may determine to terminate this Lease, enter the number of days’ notice the Landlord will give the Tenant that the Lease is terminated.

Paragraph 59 – This paragraph describes how many days’ notice to cure the Landlord will give to the Tenant for any default, other than default in payment of monies, enter how many days the tenant has to cure the default, and how many days’ notice to terminate once the Tenant does not cure the default.

Landlord’s Improvements to the Premises:

This Section describes any improvements and/or chattel that the Landlord will provide for the Tenant.

Paragraph 71 – Enter any improvements that the Landlord will provide. For example, will paint or tile the floor.

Paragraph 72 – Enter any chattel that the Landlord will provide.  Chattel refers to any tangible, movable goods. For example, chairs or desks.

Tenant’s Improvements to the Premises:

This Section describes any improvements and/or chattel that the Tenant will be responsible for.

Paragraph 74 – Enter any chattel that the Tenant will provide.  Chattel refers to any tangible, movable goods. For example, chairs or desks, computers, etc... This Chattel will belong to the Tenant and at the end of tenancy, the Tenant will have the right to remove such chattel and move with it.

Additional Provisions:

In this section, we provide you with blank space to enter any other terms or conditions to this Agreement. Most of the time, no additional terms or conditions are necessary. However, if you do enter any other terms or conditions make sure to use clear and concise sentences, and refer to the parties as the Landlord, Tenant and Guarantor, if applicable.

Notice:

In order for any notice that are required under this Agreement to be sent to the parties, enter the addresses, phone numbers and email addresses of the Landlord and Tenant to receive such notices at.

Paragraph 128 – Enter the contact details of the Landlord in subsection i. Enter the Tenant’s contact details in subsection ii.

Signature Section:

The Landlord and Tenant must sign and print their names.

If there is a Guarantor, the Guarantor must sign and print his/her name as well.

All parties should sign and have a copy of the fully executed lease for their records.

If there are any applicable exhibits or attachments, such as a blueprint or legal description of the Premises, attach it to the exhibits section.