Set feature in a Commercial Lease Agreement - Online Editor

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What is a commercial option?

An option clause is a term in a commercial lease that allows a tenant to renew their lease at the end of the original lease period, if they meet certain conditions. Landlords are not obliged to offer a renewal option.

What is a use clause in a lease?

A use clause limits the tenants conduct by outlining exactly how theyre permitted to use the space that they want to lease. A use clause be either prescriptive, defining what the tenant must do, or they can be restrictive, defining what the tenant is prohibited from doing.

What is the most common type of commercial lease?

Gross leases are most common for commercial properties such as offices and retail space.

Which of the following should be covered in a commercial lease agreement?

Base rent and monthly rent The contract must also explain if the rent includes or excludes property taxes, insurance, maintenance, utilities, and additional costs. If the rent is exclusive of these charges then the owner must specify the amount that the tenant needs to pay in regards to these expenses.

What are the major components of a percentage lease?

A percentage lease has two components base rent (or minimum rent) and a percentage of the monthly or annual gross sales made on the premises.

What are options in a commercial lease?

In commercial real estate terms, an Option is a right granted to either the tenant or the landlord. Options are typically granted via lease documentation and include renewal, expansion, contraction, termination, rights of first offer, rights of first refusal and purchase options.

What are typical clauses aspects of a commercial lease?

The Use Clause and Exclusive Clause A use clause limits how youll use the rented space. The limitations can be as broad as what business youll conduct there, as narrow as what specific services or products youll offer, or as nebulous as the quality level of your operation.

What is the severability clause in a commercial lease?

Severability Clause. The severability clause establishes that in the event a court invalidates a provision within the lease, the remaining terms of the lease remain enforceable. This provision ensures that the lease remains valid, notwithstanding any unenforceable provision.

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Set feature in the Commercial Lease Agreement