Free Commercial Lease Agreement Sample

Leana Rogers Salamah

-Dec 5, 2025

Navigating the complexities of commercial real estate can be daunting, and at the heart of many business ventures lies a crucial document: the commercial lease agreement. This legally binding contract outlines the terms and conditions under which a tenant rents commercial property from a landlord. Whether you're a business owner looking to secure a new location or a property owner aiming to lease your space, having a clear understanding of a sample commercial lease agreement is essential.

This guide will walk you through the critical components of a commercial lease, provide insights into common clauses, and offer a downloadable sample to help you get started. Our aim is to equip you with the knowledge needed to enter into a lease agreement with confidence, ensuring your business or property investment is protected.

What is a Commercial Lease Agreement?

A commercial lease agreement is a contract between a business (the tenant) and a property owner (the landlord) for the rental of property that the business will use for commercial purposes. Unlike residential leases, commercial leases are often more complex and are typically negotiated based on the specific needs of both parties. These agreements can cover a wide range of property types, including office spaces, retail stores, industrial facilities, and warehouses.

The primary purpose of a commercial lease is to define the rights and responsibilities of both the landlord and the tenant. It specifies the duration of the lease, the amount of rent, how rent increases will be handled, the permitted use of the property, and who is responsible for maintenance, repairs, and operating expenses.

Key Components of a Commercial Lease

Understanding the core elements of a commercial lease is the first step toward a successful tenancy. While specific clauses can vary significantly, most agreements will include provisions for:

Parties Involved: Full legal names and addresses of the landlord and tenant.
Premises Description: A detailed description of the leased property, including square footage and any specific areas included (e.g., parking spaces).
Lease Term: The duration of the lease, including the start and end dates. This can be a fixed term or have renewal options.
Rent: The amount of rent, the due date, and the acceptable payment methods. It should also specify any potential rent escalations (e.g., annual increases).
Security Deposit: The amount required to secure the lease against damages or unpaid rent.
Use Clause: Defines how the tenant is permitted to use the property. This is crucial for landlords to maintain property standards and for tenants to ensure their business operations are compliant.
Maintenance and Repairs: Outlines who is responsible for different types of repairs and maintenance – structural, non-structural, interior, exterior, HVAC, plumbing, electrical, etc.
Utilities and Services: Specifies which party is responsible for paying for utilities like electricity, water, gas, and trash removal, as well as services like janitorial or security.
Alterations and Improvements: Addresses whether the tenant can make changes to the property and under what conditions, including who pays for them and what happens to them at the end of the lease.
Insurance: Details the types and amounts of insurance coverage each party must maintain.
Subletting and Assignment: Specifies whether the tenant can sublet the property or assign the lease to another party.
Default and Remedies: Defines what constitutes a default by either party and the actions that can be taken to remedy the situation.
Holding Over: Terms for what happens if the tenant remains in possession of the property after the lease term expires.

Types of Commercial Leases

Commercial leases come in several forms, each with different implications for how operating expenses are handled. The most common types are: — New York City Marathon: Your Ultimate Guide

Gross Lease: In a gross lease, the tenant pays a flat rental fee, and the landlord covers all operating expenses, including property taxes, insurance, and maintenance. This is often seen in office buildings. While simpler for tenants, the rent is typically higher to account for these landlord-borne costs.
Net Lease: In a net lease, the tenant pays a base rent plus some or all of the operating expenses associated with the property. There are three types of net leases:
- Single Net Lease (N): Tenant pays base rent plus property taxes.
- Double Net Lease (NN): Tenant pays base rent plus property taxes and insurance.
- Triple Net Lease (NNN): Tenant pays base rent plus property taxes, insurance, and maintenance costs. This is common for standalone retail buildings and industrial properties, offering the landlord a more predictable income stream.
Modified Gross Lease: This is a hybrid approach where the tenant pays base rent, and the landlord covers some operating expenses, while the tenant covers others. The specifics are negotiated between the parties and clearly defined in the lease.
Percentage Lease: Common in retail, this lease requires the tenant to pay a base rent plus a percentage of their gross sales. This type of lease aligns the landlord's success with the tenant's business performance.

Our experience shows that understanding these lease types is fundamental. A Triple Net Lease, for instance, places significant responsibility on the tenant, requiring careful budgeting for property upkeep and related costs. Conversely, a Gross Lease offers more predictability for a tenant's monthly expenses.

Navigating Key Clauses in a Sample Commercial Lease Agreement

Let's delve deeper into some of the most critical clauses you'll encounter in a commercial lease sample:

Rent and Additional Rent

Beyond the base rent, many commercial leases include provisions for "Additional Rent." This typically covers a tenant's pro-rata share of the property's operating expenses, often referred to as Common Area Maintenance (CAM) charges. These can include costs for:

Property taxes
Property insurance
Utilities for common areas
Landscaping and groundskeeping
Janitorial services for common areas
Management fees

It's imperative to scrutinize CAM charges. Understand what is included, how they are calculated (e.g., based on square footage), and whether there are caps on annual increases. Our analysis of lease disputes often points to disagreements over ambiguous CAM charge clauses.

Use and Occupancy Restrictions

The "Use Clause" defines precisely what activities the tenant can conduct on the premises. Landlords use this to ensure that the tenant's business aligns with the property's zoning, the building's overall tenant mix, and the landlord's vision for the property. Tenants must ensure this clause is broad enough to accommodate their current and future business needs.

An "Occupancy Clause" may also limit the number of employees or visitors allowed in the space, impacting operational capacity.

Maintenance, Repairs, and Alterations

Responsibility for maintenance and repairs is a frequent point of contention. Typically, landlords are responsible for structural components (roof, foundation, exterior walls) and major systems (HVAC, plumbing, electrical) not damaged by the tenant. Tenants usually handle interior, non-structural maintenance and repairs, as well as any damage they cause. Always clarify these distinctions.

Regarding alterations, most leases require landlord approval for any changes to the premises. The lease should specify who pays for alterations and whether the tenant must restore the premises to its original condition at the end of the lease term.

Assignment and Subletting

Assignment means transferring the entire lease to a new tenant, while subletting means the original tenant leases part or all of the space to another party for a portion of the lease term. Most landlords require their written consent for any assignment or sublet. Some leases may allow it under certain conditions or prohibit it entirely. For businesses that might experience growth or restructuring, understanding these provisions is vital.

Default and Remedies

This section outlines what happens if either the tenant or landlord fails to uphold their lease obligations. Tenant defaults might include non-payment of rent or violating the use clause. Landlord defaults could involve failing to make necessary repairs. The remedies can range from eviction and legal action to termination of the lease and seeking damages.

Tips for Reviewing a Commercial Lease Agreement

Before signing any commercial lease agreement, whether it's a sample or a customized document, follow these best practices:

Read the Entire Document: Don't skim. Understand every clause, definition, and obligation.
Define Ambiguities: If any term or clause is unclear, ask for clarification in writing and have it incorporated into the lease.
Negotiate Key Terms: Don't be afraid to negotiate rent, lease term, tenant improvement allowances, repair responsibilities, and other critical aspects.
Understand Your Financial Obligations: Accurately calculate all costs, including base rent, additional rent (CAM, taxes, insurance), utilities, and potential build-out expenses.
Consult Legal Counsel: This is non-negotiable. Always have a qualified real estate attorney review the lease before signing. They can identify potential pitfalls and ensure your interests are protected. As noted by the U.S. Small Business Administration, professional advice is critical when entering into significant contracts like leases.
Inspect the Property Thoroughly: Ensure the property is in good condition and suitable for your business needs before signing.

Download a Sample Commercial Lease Agreement

To assist you in understanding the structure and common clauses of a commercial lease, we provide a sample agreement below. This sample is for informational purposes only and should be adapted to your specific situation and jurisdiction. It is crucial to consult with legal counsel before using or signing any lease agreement.

This sample agreement is a template and may not cover all specific scenarios or legal requirements in your area. Always seek professional legal advice.

COMMERCIAL LEASE AGREEMENT

This Commercial Lease Agreement ("Agreement") is made and entered into this [Day] day of [Month], [Year] ("Effective Date"), by and between:

LANDLORD: [Landlord's Full Legal Name] [Landlord's Address]

TENANT: [Tenant's Full Legal Name] [Tenant's Address]

1. PREMISES: Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises located at [Full Property Address, including Suite/Unit Number if applicable] ("Premises"), comprising approximately [Square Footage] rentable square feet, together with the appurtenances and fixtures thereto.

2. TERM: The term of this Agreement shall commence on [Start Date] and shall end on [End Date] ("Term"), unless sooner terminated as provided herein. — Camden County Jail: Contact & Info

3. BASE RENT: Tenant agrees to pay Landlord, without demand, as base rent, the sum of $[Monthly Rent Amount] per month, payable in advance on the [Day] day of each calendar month during the Term. All payments shall be made to Landlord at [Landlord's Payment Address] or at such other place as Landlord may designate in writing.

4. ADDITIONAL RENT: In addition to Base Rent, Tenant shall pay to Landlord, as Additional Rent, Tenant's Pro Rata Share of all Operating Expenses, as defined below. Tenant's Pro Rata Share is calculated as [Tenant's Square Footage] / [Total Building Square Footage] (approximately [Percentage]%).

Operating Expenses shall include, but not be limited to, all costs and expenses incurred by Landlord in connection with the ownership, operation, maintenance, repair, and management of the Premises and the building or complex in which the Premises are located, including, without limitation: real estate taxes and assessments; insurance premiums for fire, extended coverage, liability, and such other insurance as Landlord may deem necessary; utilities for common areas; janitorial services for common areas; security services; landscaping; repairs and maintenance to the roof, exterior walls, foundation, and common areas; management fees (not to exceed [Percentage]% of gross rents).

5. SECURITY DEPOSIT: Upon execution of this Agreement, Tenant shall deposit with Landlord the sum of $[Security Deposit Amount] as a security deposit.

6. USE OF PREMISES: Tenant shall use and occupy the Premises solely for the purpose of [Permitted Use, e.g., "general office use", "retail sale of clothing"], and for no other purpose whatsoever.

7. MAINTENANCE AND REPAIRS: Landlord shall maintain and repair the structural elements of the Premises, including the roof, foundation, and exterior walls, and the common areas. Tenant shall maintain and repair the interior of the Premises, excluding structural elements, and shall be responsible for all repairs necessitated by Tenant's use or negligence.

8. ALTERATIONS: Tenant shall not make any alterations, additions, or improvements to the Premises without the prior written consent of Landlord. All alterations, additions, or improvements made by Tenant shall become the property of Landlord upon installation, unless otherwise agreed in writing.

9. INSURANCE: Tenant shall maintain, at its sole cost and expense, commercial general liability insurance in the amount of $[Liability Amount] per occurrence and $[Aggregate Amount] in the aggregate, naming Landlord as an additional insured. Tenant shall also maintain [Specify other insurance, e.g., "property insurance covering Tenant's contents and improvements"].

10. ASSIGNMENT AND SUBLETTING: Tenant shall not assign this Agreement or sublet the Premises or any part thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed.

11. DEFAULT: If Tenant fails to pay any installment of rent when due, or if Tenant breaches any other material term of this Agreement, and such breach is not cured within [Number] days after written notice from Landlord, Landlord may pursue all remedies available at law or in equity, including termination of this Agreement and eviction of Tenant.

12. HOLDING OVER: If Tenant remains in possession of the Premises after the expiration or termination of the Term, with or without Landlord's consent, such possession shall be considered a month-to-month tenancy, subject to all terms and conditions of this Agreement, except that the monthly rent shall be [Holdover Rent Rate, e.g., "150% of the Base Rent"].

13. GOVERNING LAW: This Agreement shall be governed by and construed in accordance with the laws of the State of [State].

14. NOTICES: Any notice required or permitted under this Agreement shall be in writing and shall be delivered by personal delivery, certified mail, or overnight courier to the addresses set forth above. — Mount Vernon Square Apartments: DC Living Perfected

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.

LANDLORD:

[Landlord's Printed Name]

TENANT:

[Tenant's Printed Name]

Frequently Asked Questions About Commercial Leases

What is the difference between a commercial lease and a residential lease?

Commercial leases are typically more complex and tailored to the specific business needs of the tenant and the property. They are generally less regulated than residential leases, allowing for more negotiation on terms like rent, repairs, and lease duration. Residential leases, conversely, are standardized to protect tenants and ensure safe housing conditions.

Can I use a standard lease agreement for any commercial property?

No. Commercial properties vary significantly in type (office, retail, industrial) and in their unique features and responsibilities. A standard lease may not adequately address the specific needs or potential issues related to a particular property. It's essential to customize the lease agreement or use one specifically designed for the property type.

What does "Tenant Improvement Allowance" (TI Allowance) mean?

A Tenant Improvement Allowance is a sum of money provided by the landlord to the tenant to help pay for customizing the leased space to meet the tenant's specific business needs. This can cover costs for construction, renovations, and fixtures. The amount and terms of a TI allowance are typically negotiated before the lease is signed.

How is rent typically calculated in a commercial lease?

Rent is often calculated based on the rentable square footage of the space. In addition to a base rent, many leases include additional rent for operating expenses (CAM charges), property taxes, and insurance, particularly in net leases. The total occupancy cost is what a tenant needs to carefully evaluate.

What should I do if I can't afford the rent increase at renewal?

If you anticipate difficulty with a rent increase upon lease renewal, it's best to address it during the negotiation phase before the current lease expires. You could try negotiating a smaller increase, a longer lease term at a fixed rate, or exploring options for downsizing your space if possible. If agreement cannot be reached, you may need to consider relocating, though this incurs significant moving costs and business disruption.

Is it possible to terminate a commercial lease early?

Early termination of a commercial lease is generally difficult and often comes with penalties. The lease agreement should contain a clause detailing the conditions and consequences of early termination. These might include paying a significant fee, forfeiting the security deposit, or remaining liable for rent for the remainder of the term. Renegotiating with the landlord is often the most viable, though not guaranteed, path to early termination.

What is the landlord's responsibility regarding repairs?

Landlord responsibilities for repairs vary greatly by lease type but commonly include structural elements (roof, foundation, load-bearing walls), exterior maintenance, and sometimes major building systems like HVAC, plumbing, and electrical systems, especially in common areas or when not damaged by the tenant's actions. The lease document is the definitive source for defining these obligations.

Conclusion

A commercial lease agreement is a cornerstone of any business operating from leased premises. Understanding its components, from rent and term to repair obligations and use restrictions, is critical for both landlords and tenants. By thoroughly reviewing the terms, negotiating favorable conditions, and, most importantly, seeking professional legal advice, you can enter into an agreement that supports your business objectives and protects your investment.

This sample commercial lease agreement provides a foundational understanding, but remember that every lease should be tailored to the specific property and the parties involved. Utilize this guide and the sample as a starting point for your due diligence, ensuring a sound foundation for your commercial tenancy.

Ready to secure your business space? Consult with a commercial real estate attorney today to ensure your lease agreement is robust and protects your interests.