Commercial Lease Assignment

Commercial Lease Agreement

This Commercial Lease Agreement (Lease) is entered into on this ____ day of ___________, 20__, by and between __________________ (Landlord) and _________________ (Tenant). Landlord is the owner of land and improvements whose address is: __________________________________. Landlord makes available for lease a portion of the Building designated as ___________________ (Leased Premises).

Landlord desires to lease the Leased Premises to Tenant, and Tenant desires to lease the Leased Premises from Landlord for the term, at the rental and on the provisions set forth herein.

THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, it is agreed:

1. Term

The Initial Term of the Lease shall begin on the _____ day of _____________, 20__, and end on the _____ day of _____________, 20__. Landlord shall use its best efforts to put Tenant in possession of the Leased Premises on the beginning of the Initial Term. If Landlord is unable to timely provide the Leased Premises, rent shall abate for the period of delay. Tenant shall make no other claim against Landlord for any such delay.

Tenant may renew the Lease for one extended term of ____________. Tenant shall exercise such renewal option, if at all, by providing written notice to Landlord not less than ninety (90) days prior to the expiration of the Initial Term. The renewal term shall be at the rental set forth below and otherwise on the same covenants, conditions, and provisions as contained in this Lease.

2. Rent

Tenant shall pay to Landlord during the Initial Term rent of _________________ Dollars ($) per year, payable in installments of _______________ Dollars ($) per month. Each installment payment shall be due in advance on the first day of each calendar month during the lease term to Landlord at the following address:

The rental payment amount for any partial calendar months included in the lease term shall be prorated on a daily basis.

Tenant shall also pay to Landlord a Security Deposit in the amount of __________________ Dollars ($).

The rental for any renewal lease term, if created as permitted under this Lease, shall be ___________ Dollars ($) per year payable in installments of _______ Dollars ($) per month.

 

3. Prohibited Uses

Notwithstanding the foregoing, Tenant shall not use the Leased Premises for the purposes of storing, manufacturing, or selling any explosives, flammables, or other inherently dangerous substance, chemical, thing, or device.

4. Sublease and Assignment

Tenant shall have the right without Landlord’s consent, to assign this Lease to a business with which Tenant may merge or consolidate, to any subsidiary of Tenant, to any corporation under common control with Tenant, or to a purchaser of substantially all of Tenant’s assets.

Except as set forth above, Tenant shall not sublease all or any part of the Leased Premises or assign this Lease in whole or in part without Landlord’s consent, such consent not to be unreasonably withheld or delayed.

5. Repairs

During the lease term, the Tenant shall make, at Tenant’s expense, all necessary repairs to the Leased Premises. Repairs shall include such items as routine repairs of floors, walls, ceilings, and other parts of the Leased Premises damaged or worn through normal occupancy, except for major mechanical systems or the roof, subject to the obligations of the parties otherwise set forth in this Lease.

6. Alterations and Improvements

Tenant, at Tenant’s expense, shall have the right, on obtaining Landlord’s consent, to remodel, redecorate, and make additions, improvements, and replacements of and to all or any part of the Leased Premises from time to time as Tenant may deem desirable, provided the same are made in a workmanlike manner and utilizing good quality materials. Tenant shall have the right to place and install personal property, trade fixtures, equipment, and other temporary installations in and that the Leased Premises, and fasten the same to the premises. All personal property, equipment, machinery, trade fixtures, and temporary installations, whether acquired by Tenant at the commencement of the Lease term or placed or installed on the Leased Premises by Tenant thereafter, shall remain Tenant’s property free and clear of any claim by Landlord. Tenant shall have the right to remove the same at any time during the term of this Lease provided that Tenant shall repair, at Tenant’s expense, all damage to the Leased Premises caused by such removal.

7. Property Taxes

Landlord shall pay, prior to delinquency, all general real estate taxes and installments of special assessments coming due during the Lease term on the Leased Premises, and all personal property taxes with respect to Landlord’s personal property, if any, on the Leased Premises. Tenant shall be responsible for paying all personal property taxes with respect to Tenant’s personal property at the Leased Premises.

8. Insurance

If the Leased Premises or any other part of the Building is damaged by fire or other casualty resulting from any act of negligence by Tenant or by any of Tenant’s agents, employees, or invitees, rent shall not be diminished or abated while such damages are under repair, and Tenant shall be responsible for the costs of repair not covered by insurance.

Landlord shall maintain fire and extended coverage insurance on the Building and the Leased Premises in such amount as Landlord shall deem appropriate. Tenant shall be responsible, at its expense, for fire and extended coverage insurance on all of its personal property, including removable trade fixtures, located in the Leased Premises.

Tenant and Landlord shall, each at its own expense, maintain a policy or policies of comprehensive general liability insurance with respect to the particular activities of each in the Building with the premiums thereon fully paid on or before due date. Such insurance policy shall be issued by and binding on an insurance company approved by Landlord, and shall afford minimum protection of not less than $1,000,000 combined single limit coverage of bodily injury, property damage, or combination thereof. Tenant shall provide Landlord with current Certificates of Insurance evidencing Tenant’s compliance with this term.

9. Utilities

Tenant shall pay all charges for water, sewer, gas, electricity, telephone, internet, and other services and utilities used by Tenant on the Leased Premises during the term of this Lease unless otherwise expressly agreed in writing by Landlord. In the event that any utility or service provided to the Leased Premises is not separately metered, Landlord shall pay the amount due and separately invoice Tenant for Tenant’s pro rata share of the charges.

Tenant shall pay such all such utility charges prior to the due date. Tenant acknowledges that the Leased Premises are designed to provide standard office use electrical facilities and standard office lighting. Tenant shall not use any equipment or devices that utilize excessive electrical energy or that may, in Landlord’s reasonable opinion, overload the wiring or interfere with electrical services to other tenants.

10. Signs

Following Landlord’s consent, Tenant shall have the right to place on the Leased Premises, at locations selected by Tenant, any signs that are permitted by applicable zoning ordinances and private restrictions. Landlord may refuse consent to any proposed signage that is in Landlord’s opinion too large, deceptive, unattractive, or otherwise inconsistent with or inappropriate to the Leased Premises or use of any other tenant. Landlord shall assist and cooperate with Tenant in obtaining any necessary permission from governmental authorities or adjoining owners and occupants for Tenant to place or construct the foregoing signs. Tenant shall repair all damage to the Leased Premises resulting from the removal of signs installed by Tenant.

11. Entry

Landlord shall have the right to enter the Leased Premises at reasonable hours to inspect the same, provided Landlord shall not thereby unreasonably interfere with Tenant’s business on the Leased Premises.

12. Parking

During the term of this Lease, Tenant shall have the non-exclusive use in common with Landlord, other tenants of the Building, their guests and invitees, of the non-reserved common automobile parking areas, driveways, and footways, subject to rules and regulations for the use thereof as prescribed from time to time by Landlord. Landlord reserves the right to designate parking areas for Tenant and Tenant’s agents and employees. Tenant shall provide Landlord with a list of all license numbers for the cars owned by Tenant, its agents, and employees.

13. Building Rules

Tenant will comply with the rules of the Building adopted and altered by Landlord from time to time and will cause all of its agents, employees, invitees, and visitors to do so; all changes to such rules will be sent by Landlord to Tenant in writing. The initial rules for the Building are attached hereto as Exhibit “A” and incorporated herein for all purposes.

14. Damage and Destruction

If the Leased Premises or any part thereof or any appurtenance thereto is so damaged by fire, casualty, or structural defects, such damage or defects not being the result of any act of negligence by Tenant or by any of Tenant’s agents, employees, or invitees, that the same cannot be used for Tenant’s purposes, then Tenant shall have the right within ninety (90) days following damage to elect by notice to Landlord to terminate this Lease as of the date of such damage. In the event of minor damage to any part of the Leased Premises, and if such damage does not render the Leased Premises unusable for Tenant’s purposes, Landlord shall promptly repair such damage at the cost of the Landlord. In making the repairs called for in this paragraph, Landlord shall not be liable for any delays resulting from strikes, governmental restrictions, inability to obtain necessary materials or labor, or other matters that are beyond the reasonable control of Landlord. Tenant shall be relieved from paying rent and other charges during any portion of the Lease term that the Leased Premises are inoperable or unfit for occupancy, or use, in whole or in part, for Tenant’s purposes. Rentals and other charges paid in advance for any such periods shall be credited on the next ensuing payments if any, but if no further payments are to be made, any such advance payments shall be refunded to Tenant. The provisions of this paragraph extend not only to the matters aforesaid, but also to any occurrence that is beyond Tenant’s reasonable control and that renders the Leased Premises, or any appurtenance thereto, inoperable or unfit for occupancy or use, in whole or in part, for Tenant’s purposes.

15. Default

In the event of a default made by Tenant in the payment of rent when due to Landlord, Tenant shall have fifteen (15) days after receipt of written notice thereof to cure such default. In the event of a default made by Tenant in any of the other covenants or conditions to be kept, observed, and performed by Tenant, Tenant shall have thirty (30) days after receipt of written notice thereof to cure such default. In the event that the Tenant shall fail to cure any default within the time allowed under this paragraph, Landlord may declare the term of this Lease ended and terminated by giving Tenant written notice of such intention, and if possession of the Leased Premises is not surrendered, Landlord may reenter said premises. Landlord shall have, in addition to the remedy above provided, any other right or remedy available to Landlord on account of any Tenant default, either in law or equity. Landlord shall use reasonable efforts to mitigate its damages.

16. Quiet Possession

Landlord covenants that on performance by Tenant of its obligations hereunder, Landlord will keep and maintain Tenant in exclusive, quiet, peaceable, undisturbed, and uninterrupted possession of the Leased Premises during the term of this Lease.

17. Condemnation

If any legally constituted authority condemns the Building or such part thereof, which shall make the Leased Premises unsuitable for leasing, this Lease shall cease when the public authority takes possession, and Landlord and Tenant shall account for rental as of that date. Such termination shall be without prejudice to the rights of either party to recover compensation from the condemning authority for any loss or damage caused by the condemnation. Neither party shall have any rights in or to any award made to the other by the condemning authority.

18. Subordination

Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, or other lien presently existing or hereafter arising on the Leased Premises, or on the Building, and to any renewals, refinancing, and extensions thereof, but Tenant agrees that any such mortgagee shall have the right at any time to subordinate such mortgage, deed of trust, or other lien to this Lease on such terms and subject to such conditions as such mortgagee may deem appropriate in its discretion. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any mortgage, deed of trust or other lien now existing or hereafter placed on the Leased Premises of the Building. Tenant agrees that it will from time to time, on request by Landlord, execute and deliver to such persons as Landlord shall request a statement in recordable form certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as so modified), stating the dates to which rent and other charges payable under this Lease have been paid; stating that Landlord is not in default hereunder (or if Tenant alleges a default stating the nature of such alleged default); and further stating such other matters as Landlord shall reasonably require.

19. Security Deposit

Landlord shall hold the Security Deposit without liability for interest and as security for the performance by Tenant of Tenant’s covenants and obligations under this Lease, it being expressly understood that Tenant shall not consider the Security Deposit an advance payment of rent or a measure of Landlord’s damages in case of default. Unless otherwise provided by law or regulation, Landlord may commingle the Security Deposit with Landlord’s other funds. Landlord may, from time to time, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages of rent or to satisfy any other covenant or obligation of Tenant hereunder. Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. If Tenant is not in default at the termination of this Lease, Landlord shall return the balance of the Security Deposit remaining after any such application to Tenant.

20. Notice

Any notice required or permitted under this Lease shall be deemed sufficiently given or served if sent by United States certified mail, return receipt requested, addressed as follows: 

Landlord:

  

Tenant:

Landlord and Tenant shall each have the right from time to time to change the place notice is to be given under this paragraph by written notice to the other party.

21. Brokers

Tenant represents that Tenant was not shown the Premises by any real estate broker or agent, and that Tenant has not otherwise engaged in, any activity that could form the basis for a claim for real estate commission, brokerage fee, finder’s fee, or other similar charge, in connection with this Lease.

22. Waiver

No waiver of any default of Landlord or Tenant hereunder shall be implied from any omission to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver, and that only for the time and to the extent therein stated. One or more waivers by Landlord or Tenant shall not be construed as a waiver of a subsequent breach of the same covenant, term, or condition.

23. Memorandum of Lease

The parties hereto contemplate that this Lease should not and shall not be filed for record, but in lieu thereof, at the request of either party, Landlord and Tenant shall execute a Memorandum of Lease to be recorded for the purpose of giving record notice of the appropriate provisions of this Lease.

24. Headings

The headings used in this Lease are for convenience of the parties only and shall not be considered in interpreting the meaning of any provision of this Lease.

25. Successors

The provisions of this Lease shall extend to and be binding on Landlord and Tenant and their respective legal representatives, successors, and assigns.

26. Consent

Landlord shall not unreasonably withhold or delay its consent with respect to any matter for which Landlord’s consent is required or desirable under this Lease.

27. Performance

If there is a default with respect to any of Landlord’s covenants, warranties, or representations under this Lease, and if the default continues more than fifteen (15) days after notice in writing from Tenant to Landlord specifying the default, Tenant may, at its option and without affecting any other remedy hereunder, cure such default and deduct the cost thereof from the next accruing installment or installments of rent payable hereunder until Tenant shall have been fully reimbursed for such expenditures, together with interest thereon at a rate equal to the lesser of ______ percent (%) per annum or the then-highest lawful rate. If this Lease terminates prior to Tenant’s receiving full reimbursement, Landlord shall pay the un-reimbursed balance plus accrued interest to Tenant on demand.

28. Compliance with Law

Tenant and Landlord each shall comply with all laws, orders, ordinances, and other public requirements now or hereafter affecting the Leased Premises.

29. Dispute Resolution

Except for any claim relating to Tenant’s default in the payment of rent, Landlord and Tenant agree to submit any and all other claims, controversies, and disputes between Tenant and Landlord arising out of or relating to the Leased Premises, this Lease, or the parties’ performances due hereunder to mediation pursuant to the mediation rules contained in applicable state statutes and rules of civil procedure, prior to demanding arbitration. Landlord and Tenant agree to maintain all communications made at such mediation in the strictest confidence between themselves and their counsel unless otherwise required to disclose same under applicable law.

If, after sixty (60) days of mediation, the parties fail to reach agreement, the claim, controversy, or dispute shall be resolved by binding arbitration administered by and in accordance with the commercial rules of the American Arbitration Association, and any court of competent jurisdiction shall enter final judgment on any such final award rendered by the arbitrators.

30. Final Agreement

This Agreement terminates and supersedes all prior understandings or agreements on the subject matter hereof. This Agreement may be modified only by a further writing that is duly executed by both parties.

 

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.

_____________________________________

Landlord

______________________________________

Tenant

BUSI 561

Paper: Commercial Lease Analysis Assignment Instructions

Overview

In this paper, you will review the commercial lease agreement provided and respond to questions analyzing the terms of that lease. The paper must be at least 1,200 words and include at least 3 scholarly sources other than the course textbook/materials.

Instructions

Review the Commercial Lease Agreement.

Answer the questions below with a minimum of 200 words for each answer (a total of at least 1,200 words), and a total of at least three scholarly sources other than the textbook, cited in-text and in a reference list in current APA format. While Question 6 directly addresses a Biblical worldview, such principles should also inform your answers throughout.

Add an APA-formatted title page, headers, and page numbers to your answers.

1. What is the distinction between a “commercial” and a “residential” lease? How do the differences in use of the leased property impact the terms of the lease? In a commercial lease agreement, should the law seek to protect the interests of the commercial tenant more than the interests of the commercial landlord? Why or why not?

2. Sections 5 and 6, respectively, impose on the commercial tenant the obligation of making repairs to the leased property, and of making alterations and improvements to the leased property. Should the lease impose these obligations on the tenant, or should such obligations be legally imposed on the commercial landlord? Explain your answer.

3. In the default provisions of Section 15, what is the landlord’s duty to “mitigate” damages? Should the landlord be required by law to mitigate? Explain.

4. Sections 2 and 19 discuss the creation of, and the parties’ rights in, the security deposit. Do these rights favor the landlord or the tenant? Is that appropriate? Why or why not?

5. Section 29 requires mediation, followed by arbitration, in lieu of litigation, to resolve disputes. What are the advantages and disadvantages of such a provision? How should mediators and arbitrators be selected?

6. As a businessperson guided by a Biblical worldview, what changes would you make in this lease to make the terms comport more closely to Scripture?