Common use of Types Gross Clause in Contracts

Types Gross. The preferred situation for the tenant, as the tenant is only required to pay a monthly fee, and all other maintenance and tax bills including repairs are taken care of by the landlord. Modified Gross – This agreement is in-between Gross and Triple Net (NNN), as the landlord and tenant will divide the costs amongst them. Simply put, both the tenant and landlord will share a part of the maintenance and tax costs. Triple Net (NNN) – The best situation for the landlord, as the tenant is responsible for paying all maintenance, tax, utility, and repair costs to the property. Required Disclosures Arbitration of Disputes (BPC 7191) – The following statement must be included and typed in 8-point roman boldface type and capitalized, if and when arbitration is mentioned in the agreement: “NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.” “WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.” CASp Report (CIV 55.53) – Certified Access Specialist (CASp) Reports must be given to the new tenant(s), and a report may be requested by said tenant up to forty-eight (48) hours prior to signing the lease. If no CASp Report is issued, the following statement must be entered into the lease agreement: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Repairs (CIV 1938) – The landlord shall be held responsible for maintaining the property, UNLESS the landlord and tenant come to a separate agreement. Versions (3) Standard Version Download: Adobe PDF, MS Word First Tuesday Version Download: Adobe PDF California Assoc. of Realtors Version Download: Adobe PDF Download (PDF, 210KB) Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. A commercial lease agreement is used when a landlord leases a property to a tenant for business purposes. It is distinct from a residential lease agreement which is used when a landlord rents a property to a tenant to live in instead of working in. Commercial lease agreements can be complicated documents. This guide explains how these contracts work, who should create one and what should be included. You’ll also find a commercial lease agreement template that you can use to help you create your own agreement with your landlord or tenants when commercial property is for lease. A commercial lease agreement template is specifically geared towards addressing the issues that arise when a landlord rents a non-residential property to another entity. This template can serve as a guide to help landlords and tenants create a personalized, legally binding contract that protects the rights of both parties while clearly establishing their obligations under the lease agreement. A commercial lease agreement is a legally binding contract entered into between a landlord and a tenant renting a property for commercial purposes. Commercial lease agreements also go by other names including: Business rental agreements Business lease agreements Commercial lease contracts Office lease contracts Office lease agreements Commercial property lease agreements Commercial real estate lease These leases can be used when a landlord rents out any type of commercial property including but not limited to: Offices Warehouses Retail spaces Industrial spaces Factories Workshops Restaurants Healthcare facilities When a commercial lease agreement is created, it should outline the rights and obligations of all parties, any limitations on the use of the commercial space and the duration of the lease agreement. The more detailed information that is included, the less chance there is of disputes arising and the easier it will be to determine an appropriate resolution when an issue does come up. A commercial lease agreement is used any time commercial space, such as an office building, is rented. The lease agreement ensures both the landlord and tenant understand what is expected of them. Because the contract is legally binding, it also gives both a landlord and tenant legal rights and the ability to pursue a remedy in court if either party violates the agreement. Landlords usually create a commercial lease agreement, which tenants can review and sign (or negotiate the terms of if they are not satisfied with the agreement as the landlord has drafted it). If a landlord does not create a commercial lease agreement, tenants can draft their own document, negotiate on its provisions and ask the landlord to sign it before the tenant officially occupies the premises. Anyone involved in either side of the commercial property rental transaction must be sure they have signed a written lease before a tenant moves into a rented space. That way, there’s no question of how the real estate transaction will unfold—and the risk of problems arising will be reduced. The parties involved in a commercial agreement typically include: The landlord who owns the commercial space The tenant Since commercial spaces are often used by businesses, it can be somewhat complicated to determine exactly who is a party to the agreement. Some businesses, like corporations, exist as their own legal entities entirely separate from their owners. These businesses can enter into legally binding contracts—including lease agreements. So, a company itself could be a tenant. However, landlords want to be sure they are getting paid, and there’s a risk if the lease is signed by a company that fails. A landlord may require a person to cosign or guarantee a commercial lease agreement unless the business renting it is well established, has a good business credit score, and has plenty of income and assets to cover rental costs. Many different clauses should be included in a commercial lease agreement. These include the following: The contact details of all parties including the landlord and tenant(s) The location of the commercial property being rented The rent amount and payment instructions including the due date The length of the lease When the lease starts and ends Whether the lease is renewable The amount of the security deposit and details about when and why the deposit may be returned or not be returned The amount of space available The type of lease (a gross lease, a net lease, or a triple net lease) The allowable use of the property If taxes, utilities or insurance are the responsibility of the tenant Any restrictions on what tenants can and can’t do with the property Any restrictions on subletting or assigning the property There may be other clauses to include depending on the specifics of the landlord/tenant relationship. However, these are the basic components of a commercial lease agreement that should typically be included in any commercial lease template. Commercial leases can be broadly grouped into three categories, which relate to who covers expenses. A gross lease. A gross lease is a lease that requires the tenant to cover only rent. The landlord is responsible for everything else, including maintenance and property taxes. While most residential leases are gross leases, this is not the case for commercial leases which are often net leases or triple net (net-net-net) agreements. A net lease. With a net lease, the tenant bears some costs on top of the rent, such as property taxes or insurance. The contract should specify what other operating costs of the property the landlord is responsible for. A triple net (NNN) lease. With a triple net lease, tenants are responsible for 100% of operating costs on top of the rent they owe. This includes maintenance, repairs, property taxes, insurance and rent paid to the landlord as well. It is important for a commercial lease agreement to clearly establish whether a lease is a gross lease, a net lease or a triple net lease. A commercial lease template can be a great tool to help you draft a contract when you plan to rent out commercial space. But there is no substitute for legal advice, especially on a contract that is legally binding and that could have a monetary value of thousands or even tens of thousands or more over the course of the year. It’s always best to talk with an experienced attorney for help before drafting or signing a commercial lease so you can make sure the document is reasonably favorable to you and contains clauses that protect your rights. There is no minimum or maximum term for a commercial lease set by law. Landlords and tenants can determine on their own how long a lease term should be. Most commercial leases last for at least a year for practical reasons, and some last for many years as companies may not want to get established in a retail location or warehouse facility only to have to relocate. Commercial leases could be gross, net or triple net. With a gross lease, the tenant is only responsible for rent and the landlord covers everything else like repairs and property taxes. This is most similar to a residential lease. With a net lease, the tenant is responsible for rent and some additional operating expenses as defined in the lease agreement. And with a triple net lease, the tenant is responsible for virtually all expenses, including repairs and property taxes on the rented space. Assigning a commercial lease means the original tenant transfers their rights and obligations under the lease agreement to a new tenant. In some cases, you may be able to assign a commercial lease but in other circumstances, your contact with the original landlord may specify that this is not allowed. If you expect you will need to assign your lease in the future, you should talk with an experienced real estate lawyer to find out your options. Was this article helpful? The California commercial lease agreement is a contract used specifically to rent commercial spaces to businesses. This written document describes the terms and conditions associated with renting industrial spaces, retail stores, and office space. This type of lease is often more complicated than a standard residential lease. A commercial lease agreement is a legally binding contract between a landlord who owns a commercial property and a tenant who wishes to rent the commercial property with the intention to operate a business. The commercial property being rented generally falls into a retail, office or industrial space category. Three basic types of commercial leases exist. Each one has positive and negative aspects for the landlord and tenant. The three variations of commercial leases are defined as: Gross Lease – also known as a full service lease, this type of agreement is considered to be tenant-friendly. In this situation, the tenant pays a predetermined amount for monthly rent. The landlord uses these funds to pay for related property expenses, also known as “nets.” Nets include taxes, insurance and common area expenses. Triple Net (NNN) Lease – favorable type of lease for the landlord, this type of agreement requires the tenant to pay all taxes, insurance and common area expenses associated with the property, in addition to their base rent amount. Modified Gross Lease – this type of agreement serves as a compromise between a gross lease and triple net lease. In a modified gross lease, the landlord and tenant negotiate which nets each party is responsible to pay. Commercial lease agreements can have a significant impact on the financial well-being of all parties involved. It is important that the landlord and tenant fully understand and agree to the terms of the lease proposed prior to signing it into a legally binding document. Required Disclosures for a Commercial Lease Agreement in California Disclosures that must be included in a commercial lease agreement vary depending on individual state regulations. This section lists all disclosures that should be addressed in a commercial lease agreement in the state of California: Asbestos Disclosure: The landlord of any property built prior to 1979 must disclose whether asbestos is known to be contained in the structure or on the premises. This notice must indicate the specific location of the asbestos on the property and the necessary procedures to follow to prevent exposure to the hazardous material.

Types Gross. The preferred situation for the tenant, as the tenant is only required to pay a monthly fee, and all other maintenance and tax bills including repairs are taken care of by the landlord. Modified Gross – This agreement is in-between Gross and Triple Net (NNN), as the landlord and tenant will divide the costs amongst them. Simply put, both the tenant and landlord will share a part of the maintenance and tax costs. Triple Net (NNN) – The best situation for the landlord, as the tenant is responsible for paying all maintenance, tax, utility, and repair costs to the property. Required Disclosures Arbitration of Disputes (BPC 7191) – The following statement must be included and typed in 8-point roman boldface type and capitalized, if and when arbitration is mentioned in the agreement: “NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.” “WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.” CASp Report (CIV 55.53) – Certified Access Specialist (CASp) Reports must be given to the new tenant(s), and a report may be requested by said tenant up to forty-eight (48) hours prior to signing the lease. If no CASp Report is issued, the following statement must be entered into the lease agreement: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Repairs (CIV 1938) – The landlord shall be held responsible for maintaining the property, UNLESS the landlord and tenant come to a separate agreement. Versions (3) Standard Version Download: Adobe PDF, MS Word First Tuesday Version Download: Adobe PDF California Assoc. of Realtors Version Download: Adobe PDF Download (PDF, 210KB) Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. A commercial 4.7 Stars | 348 Ratings 5,034 Downloads Updated May 25, 2023A California lease agreement is used when allows a landlord leases a of residential or commercial property to a tenant for business purposes. It is distinct from a residential lease agreement which is used when a landlord rents a property to a tenant to live in instead of working in. Commercial lease agreements can be complicated documents. This guide explains how these contracts work, who should create one and what should be included. You’ll also find a commercial lease agreement template that you can use to help you create your own agreement with your landlord or tenants when commercial property is for lease. A commercial lease agreement template is specifically geared towards addressing the issues that arise when a landlord rents a non-residential property to another entity. This template can serve as a guide to help landlords and tenants create a personalized, legally binding contract that protects the rights of both parties while clearly establishing their obligations under the lease agreement. A commercial lease agreement is write a legally binding rental contract entered into between with a landlord tenant. The agreement will describe the property, specify the monthly rent, and list the responsibilities of both parties. After signing, the tenant will be obligated to pay the first month’s rent and a tenant renting a property for commercial purposessecurity deposit, if any, before access is given to the premises. Commercial lease agreements also go by other names including: Business rental agreements Business lease agreements Commercial lease contracts Office lease contracts Office lease agreements Commercial property lease agreements Commercial real estate lease These leases can be used when a landlord rents out any type of commercial property including but not limited to: Offices Warehouses Retail spaces Industrial spaces Factories Workshops Restaurants Healthcare facilities When a commercial lease agreement is created, it should outline the rights and obligations of all parties, any limitations on the use of the commercial space and the duration of the lease agreement. The more detailed information that is included, the less chance there is of disputes arising and the easier it will be to determine an appropriate resolution when an issue does come up. A commercial lease agreement is used any time commercial space, such as an office building, is rented. The lease agreement ensures both the Both landlord and tenant understand what is expected of them. Because the contract is legally binding, it also gives both a landlord and tenant legal rights and the ability to pursue a remedy in court if either party violates the agreement. Landlords usually create a commercial lease agreement, which tenants can review and sign (or negotiate the terms of if they are not satisfied with the agreement as the landlord has drafted it). If a landlord does not create a commercial lease agreement, tenants can draft their own document, negotiate on its provisions and ask the landlord to sign it before the tenant officially occupies the premises. Anyone involved in either side of the commercial property rental transaction must be sure they have signed a written lease before a tenant moves into a rented space. That way, there’s no question of how the real estate transaction will unfold—and the risk of problems arising will be reduced. The parties involved in a commercial agreement typically include: The landlord who owns the commercial space The tenant Since commercial spaces are often used by businesses, it can be somewhat complicated to determine exactly who is a party to the agreement. Some businesses, like corporations, exist as their own legal entities entirely separate from their owners. These businesses can enter into legally binding contracts—including lease agreements. So, a company itself could be a tenant. However, landlords want to be sure they are getting paid, and there’s a risk if the lease is signed by a company that fails. A landlord may require a person to cosign or guarantee a commercial lease agreement unless the business renting it is well established, has a good business credit score, and has plenty of income and assets to cover rental costs. Many different clauses should be included in a commercial lease agreement. These include the following: The contact details of all parties including the landlord and tenant(s) The location of the commercial property being rented The rent amount and payment instructions including the due date The length of the lease When the lease starts and ends Whether the lease is renewable The amount of the security deposit and details about when and why the deposit may be returned or not be returned The amount of space available The type of lease (a gross lease, a net lease, or a triple net lease) The allowable use of the property If taxes, utilities or insurance are the responsibility of the tenant Any restrictions on what tenants can and can’t do with the property Any restrictions on subletting or assigning the property There may be other clauses to include depending on the specifics of the landlord/tenant relationship. However, these are the basic components of a commercial lease agreement that should typically be included in any commercial lease template. Commercial leases can be broadly grouped into three categories, which relate to who covers expenses. A gross lease. A gross lease is a lease that requires the tenant to cover only rent. The landlord is responsible for everything else, including maintenance and property taxes. While most residential leases are gross leases, this is not the case for commercial leases which are often net leases or triple net (net-net-net) agreements. A net lease. With a net lease, the tenant bears some costs on top of the rent, such as property taxes or insurance. The contract should specify what other operating costs of the property the landlord is responsible for. A triple net (NNN) lease. With a triple net lease, tenants are responsible for 100% of operating costs on top of the rent they owe. This includes maintenance, repairs, property taxes, insurance and rent paid to the landlord as well. It is important for a commercial lease agreement to clearly establish whether a lease is a gross lease, a net lease or a triple net lease. A commercial lease template can be a great tool to help you draft a contract when you plan to rent out commercial space. But there is no substitute for legal advice, especially on a contract that is legally binding and that could have a monetary value of thousands or even tens of thousands or more over the course of the year. It’s always best to talk with an experienced attorney for help before drafting or signing a commercial lease so you can make sure the document is reasonably favorable to you and contains clauses that protect your rights. There is no minimum or maximum term for a commercial lease set by law. Landlords and tenants can determine on their own how long a lease term should be. Most commercial leases last for at least a year for practical reasons, and some last for many years as companies may not want to get established in a retail location or warehouse facility only to have to relocate. Commercial leases could be gross, net or triple net. With a gross lease, the tenant is only responsible for rent and the landlord covers everything else like repairs and property taxes. This is most similar to a residential lease. With a net lease, the tenant is responsible for rent and some additional operating expenses as defined in the lease agreement. And with a triple net lease, the tenant is responsible for virtually all expenses, including repairs and property taxes on the rented space. Assigning a commercial lease means the original tenant transfers their rights and obligations under the lease agreement to a new tenant. In some cases, you may be able to assign a commercial lease but in other circumstances, your contact with the original landlord may specify that this is not allowed. If you expect you will need to assign your lease in the future, you should talk with an experienced real estate lawyer to find out your options. Was this article helpful? The California commercial lease agreement is a contract used specifically to rent commercial spaces to businesses. This written document describes the terms and conditions associated with renting industrial spaces, retail stores, and office space. This type of lease is often more complicated than a standard residential lease. A commercial lease agreement is a legally binding contract between a landlord who owns a commercial property and a tenant who wishes to rent the commercial property with the intention to operate a business. The commercial property being rented generally falls into a retail, office or industrial space category. Three basic types of commercial leases exist. Each one has positive and negative aspects for the landlord and tenant. The three variations of commercial leases are defined as: Gross Lease – also known as a full service lease, this type of agreement is considered to be tenant-friendly. In this situation, the tenant pays a predetermined amount for monthly rent. The landlord uses these funds to pay for related property expenses, also known as “nets.” Nets include taxes, insurance and common area expenses. Triple Net (NNN) Lease – favorable type of lease for the landlord, this type of agreement requires the tenant to pay all taxes, insurance and common area expenses associated with the property, in addition to their base rent amount. Modified Gross Lease – this type of agreement serves as a compromise between a gross lease and triple net lease. In a modified gross lease, the landlord and tenant negotiate which nets each party is responsible to pay. Commercial lease agreements can have a significant impact on the financial well-being of all parties involved. It is important that the landlord and tenant fully understand and agree bound to the terms of the agreement until the lease proposed prior end date. Rental Application – Should be used by the landlord before signing a contract to signing it into a legally binding documenthelp verify that the individual applying for the space is credible. Required Disclosures Standard Lease Agreement– Most common type of residential lease for a an established term, usually one year, and both parties are bound to the terms until its end date. Download: Adobe PDF, MS Word, OpenDocument Commercial Lease Agreement – For use for any business by an individual or entity with an owner of an office, retail, or industrial property. Download: Adobe PDF, MS Word, OpenDocument Month-to-Month Lease Agreement (Section 1946) – Rental contract with no end date. Either party may cancel with 30 days’ notice if the tenancy is less than one year and 60 days if the lease is more than a year. Download: Adobe PDF, MS Word, OpenDocument Rent-to-Own Lease Agreement – Traditionally, a fixed-term contract with the added benefit of being able to buy the residence during a stated “option” period. Download: Adobe PDF, MS Word, OpenDocument Room Rental (Roommate) Agreement – For a residence with more than one individual seeking to occupy bedrooms while sharing common areas separately. Download: Adobe PDF, MS Word, OpenDocument Sublease Agreement – A tenant that decides to rent space they are currently involved in a lease with the landlord. Usually, the tenant must receive written confirmation before authorizing a sub-lessee. Download: Adobe PDF, MS Word, OpenDocument AB 1482 Just Cause and Rent Limit Addendum (CIV 1946.2(e)) & 1947.12(d)(5)(B)(i)) – AB 1482 is a law that went into effect in California Disclosures on Jan. 1, 2020. It has two main impacts: (1) it limits how much a landlord may increase the rent on a property from year to year, and (2) it requires that a landlord have “just cause” for terminating a tenancy. For any tenancy beginning after July 1, 2020, all tenants must be included provided with a written notice, with the following printed in a commercial lease agreement vary depending on individual state regulationssize 12-point font or larger: California law limits the amount your rent can be increased. This section lists all disclosures that should be addressed in a commercial lease agreement in the state of California: Asbestos Disclosure: The landlord of any property built prior to 1979 must disclose whether asbestos is known to be contained in the structure or on the premises. This notice must indicate the specific location See Section 1947.12 of the asbestos on the property and the necessary procedures to follow to prevent exposure to the hazardous materialCivil Code for more information.

Types Gross. The preferred situation for the tenant, as the tenant is only required to pay a monthly fee, and all other maintenance and tax bills including repairs are taken care of by the landlord. normal_64475d130e2a0.pdf Modified Gross – This agreement is in-between Gross and Triple Net (NNN), as the landlord and tenant will divide the costs amongst them. Simply put, both the tenant and landlord will share a part of the maintenance and tax costs. Triple Net (NNN) – The best situation for the landlord, as the tenant is responsible for paying all maintenance, tax, utility, and repair costs to the property. Required Disclosures Arbitration of Disputes (BPC 7191) – The following statement must be included and typed in 8-point roman boldface type and capitalized, if and when arbitration is mentioned in the agreement: “NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.” “WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.” CASp Report (CIV 55.53) – Certified Access Specialist (CASp) Reports must be given to the new tenant(s), and a report may be requested by said tenant up to forty-eight (48) hours prior to signing the lease. If no CASp Report is issued, the following statement must be entered into the lease agreement: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Repairs (CIV 1938) – The landlord shall be held responsible for maintaining the property, UNLESS the landlord and tenant come to a separate agreement. Versions (3) Standard Version Download: Adobe PDF, MS Word First Tuesday Version Download: Adobe PDF California Assoc. of Realtors Version Download: Adobe PDF Download (PDF, 210KB) Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. A Updated April 14, 2023A California commercial lease agreement acts as a binding contract between the landlord and a business tenant who is used when a landlord leases a property to a tenant renting the space for business purposes. It is distinct from a residential lease agreement which is used when a landlord rents a property to a tenant to live in instead of working in. Commercial lease agreements can be complicated documents. This guide explains how these contracts work, who should create one and what should be included. You’ll also find a commercial lease agreement template that you can use to help you create your own agreement with your landlord or tenants when commercial property is for lease. A commercial lease agreement template is specifically geared towards addressing the issues that arise when a landlord rents a non-residential property to another entityuse, such as retail, office space, industrial, or hospitality. This template can serve as screenplay treatment example pdf The document outlines the terms and conditions of the lease, including rent payment, security deposit, length of the lease, and penalties for breaching the contract. Once signed by both parties, the agreement becomes a guide to help landlords and tenants create a personalized, legally binding contract that protects is enforceable in a court of law. codewords 99 quiz answers Because commercial tenants do not have the same rights of both parties while clearly establishing their obligations under the lease agreement. A commercial lease agreement is a legally binding contract entered into between a landlord and a tenant renting a property for commercial purposes. Commercial lease agreements also go by other names including: Business rental agreements Business lease agreements Commercial lease contracts Office lease contracts Office lease agreements Commercial property lease agreements Commercial real estate lease These leases can be used when a landlord rents out any type of commercial property including but not limited to: Offices Warehouses Retail spaces Industrial spaces Factories Workshops Restaurants Healthcare facilities When a commercial lease agreement is createdprotections as residential tenants, it should outline is highly recommended that an attorney review the rights and obligations of all partiesagreement before it is signed. Related Forms Commercial Lease Application Download: Adobe PDF Personal Guarantee Form Download: Adobe PDF Fill Now Click to fill, any limitations on the use of the commercial space and the duration of the lease agreement. The more detailed information that is included, the less chance there is of disputes arising and the easier it will be to determine an appropriate resolution when an issue does come up. A commercial lease agreement is used any time commercial space, such as an office building, is rented. The lease agreement ensures both the landlord and tenant understand what is expected of them. Because the contract is legally binding, it also gives both a landlord and tenant legal rights and the ability to pursue a remedy in court if either party violates the agreement. Landlords usually create a commercial lease agreement, which tenants can review edit and sign (or negotiate the terms of if they are not satisfied with the agreement as the landlord has drafted it). If a landlord does not create a commercial lease agreement, tenants can draft their own document, negotiate on its provisions and ask the landlord to sign it before the tenant officially occupies the premises. Anyone involved in either side of the commercial property rental transaction must be sure they have signed a written lease before a tenant moves into a rented space. That way, there’s no question of how the real estate transaction will unfold—and the risk of problems arising will be reduced. The parties involved in a commercial agreement typically include: The landlord who owns the commercial space The tenant Since commercial spaces are often used by businesses, it can be somewhat complicated to determine exactly who is a party to the agreement. Some businesses, like corporations, exist as their own legal entities entirely separate from their owners. These businesses can enter into legally binding contracts—including lease agreements. So, a company itself could be a tenant. However, landlords want to be sure they are getting paid, and there’s a risk if the lease is signed by a company that fails. this form now! A landlord may require a person to cosign or guarantee a commercial lease agreement unless the business renting it is well established, has a good business credit score, and has plenty of income and assets to cover rental costs. Many different clauses should be included in a commercial lease agreement. These include the following: The contact details of all parties including the landlord and tenant(s) The location of the commercial property being rented The rent amount and payment instructions including the due date The length of the lease When the lease starts and ends Whether the lease is renewable The amount of the security deposit and details about when and why the deposit may be returned or not be returned The amount of space available The type of lease (a gross lease, a net lease, or a triple net lease) The allowable use of the property If taxes, utilities or insurance are the responsibility of the tenant Any restrictions on what tenants can and can’t do with the property Any restrictions on subletting or assigning the property There may be other clauses to include depending on the specifics of the landlord/tenant relationship. However, these are the basic components of a commercial lease agreement that should typically be included in any commercial lease template. Commercial leases can be broadly grouped into three categories, which relate to who covers expenses. A gross lease. A gross lease is a lease that requires the tenant to cover only rent. The landlord is responsible for everything else, including maintenance and property taxes. While most residential leases are gross leases, this is not the case for commercial leases which are often net leases or triple net (net-net-net) agreements. A net lease. With a net lease, the tenant bears some costs on top of the rent, such as property taxes or insurance. The contract should specify what other operating costs of the property the landlord is responsible for. A triple net (NNN) lease. With a triple net lease, tenants are responsible for 100% of operating costs on top of the rent they owe. This includes maintenance, repairs, property taxes, insurance and rent paid to the landlord as well. It is important for a commercial lease agreement to clearly establish whether a lease is a gross lease, a net lease or a triple net lease. A commercial lease template can be a great tool to help you draft a contract when you plan to rent out commercial space. But there is no substitute for legal advice, especially on a contract that is legally binding and that could have a monetary value of thousands or even tens of thousands or more over the course of the year. It’s always best to talk with an experienced attorney for help before drafting or signing a commercial lease so you can make sure the document is reasonably favorable to you and contains clauses that protect your rights. There is no minimum or maximum term for a commercial lease set by law. Landlords and tenants can determine on their own how long a lease term should be. Most commercial leases last for at least a year for practical reasons, and some last for many years as companies may not want to get established in a retail location or warehouse facility only to have to relocate. Commercial leases could be gross, net or triple net. With a gross lease, the tenant is only responsible for rent and the landlord covers everything else like repairs and property taxes. This is most similar to a residential lease. With a net lease, the tenant is responsible for rent and some additional operating expenses as defined in the lease agreement. And with a triple net lease, the tenant is responsible for virtually all expenses, including repairs and property taxes on the rented space. Assigning a commercial lease means the original tenant transfers their rights and obligations under the lease agreement to a new tenant. In some cases, you may be able to assign a commercial lease but in other circumstances, your contact with the original landlord may specify that this is not allowed. If you expect you will need to assign your lease in the future, you should talk with an experienced real estate lawyer to find out your options. Was this article helpful? The California commercial lease agreement is a contract used specifically to rent commercial spaces to businesses. This written document describes the terms and conditions associated with renting industrial spaces, retail stores, and office space. This type of lease is often more complicated than a standard residential lease. A commercial lease agreement is a legally binding contract between a landlord who owns and tenant that conveys terms and conditions for the leasing of commercial property. Commercial tenants will often negotiate the provisions of the agreement to achieve a lease term and base rent that accommodates their business needs. Tenants may be entitled to renew the agreement for an additional term by notifying the landlord prior to the initial termination date. After the lease conditions have been negotiated, the parties may sign the contract to create a legally binding tenancy agreement. Lease Application – Enables a landlord to investigate the background information of a potential leaseholder. California Realtor Commercial Lease Agreement – This is the 2010 version of the commercial lease agreement produced by the California Association of Realtors®. Death Disability Access Inspection 1) Death If a previous occupant has died on the property and a tenant who wishes within the last three (3) years, the landlord must disclose this information to rent prospective tenants. Laws: CIV Code § 1710.2(a)(1)(A) 2) Disability Access Inspection The landlord must disclose whether the commercial property with has been inspected by a Certified Access Specialist (CASp). If an inspection took place, a copy of the intention report must be given to operate a business. The commercial property being rented generally falls the tenant before entering into a retail, office or industrial space categoryrental agreement. Three basic types of commercial leases exist. Each one If the property has positive and negative aspects for the landlord and tenant. The three variations of commercial leases are defined as: Gross Lease – also known as a full service lease, this type of agreement is considered to be tenant-friendly. In this situation, the tenant pays a predetermined amount for monthly rent. The landlord uses these funds to pay for related property expenses, also known as “nets.” Nets include taxes, insurance and common area expenses. Triple Net (NNN) Lease – favorable type of lease for the landlord, this type of agreement requires the tenant to pay all taxes, insurance and common area expenses associated with the property, in addition to their base rent amount. Modified Gross Lease – this type of agreement serves as a compromise between a gross lease and triple net lease. In a modified gross leasenot been inspected, the landlord and tenant negotiate which nets must include in each party is responsible to pay. Commercial lease agreements can have a significant impact on the financial well-being of all parties involved. It is important that the landlord and tenant fully understand and agree to the terms of the lease proposed prior to signing it into a legally binding document. Required Disclosures for a Commercial Lease Agreement in California Disclosures that must be included in a commercial lease agreement vary depending on individual state regulations. This section lists all disclosures that should be addressed a statement containing the language specified in a commercial lease agreement in the state of California: Asbestos Disclosure: The landlord of any property built prior to 1979 must disclose whether asbestos is known to be contained in the structure or on the premises. This notice must indicate the specific location of the asbestos on the property and the necessary procedures to follow to prevent exposure to the hazardous materialCIV Code § 1938(e).

Types Gross. The preferred situation for the tenant, as the tenant is only required to pay a monthly fee, and all other maintenance and tax bills including repairs are taken care of by the landlord. Modified Gross – This agreement is in-between Gross and Triple Net (NNN), as the landlord and tenant will divide the costs amongst them. Simply put, both the tenant and landlord will share a part of the maintenance and tax costs. Triple Net (NNN) – The best situation for the landlord, as the tenant is responsible for paying all maintenance, tax, utility, and repair costs to the property. Required Disclosures Arbitration of Disputes (BPC 7191) – The following statement must be included and typed in 8-point roman boldface type and capitalized, if and when arbitration is mentioned in the agreement: “NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.” “WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.” CASp Report (CIV 55.53) – Certified Access Specialist (CASp) Reports must be given to the new tenant(s), and a report may be requested by said tenant up to forty-eight (48) hours prior to signing the lease. If no CASp Report is issued, the following statement must be entered into the lease agreement: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Repairs (CIV 1938) – The landlord shall be held responsible for maintaining the property, UNLESS the landlord and tenant come to a separate agreement. Versions (3) Standard Version Download: Adobe PDF, MS Word First Tuesday Version Download: Adobe PDF California Assoc. of Realtors Version Download: Adobe PDF Download (PDF, 210KB) Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. A commercial lease agreement is used when a landlord leases a property to a tenant for business purposes. It is distinct from a residential lease agreement which is used when a landlord rents a property to a tenant to live in instead of working in. California Commercial lease agreements can be complicated documents. This guide explains how these contracts work, who should create one and what should be included. You’ll also find a commercial lease agreement template that you can use to help you create your own agreement with your landlord or tenants when commercial property is for lease. A commercial lease agreement template is specifically geared towards addressing the issues that arise when a landlord rents a non-residential property to another entity. This template can serve as a guide to help landlords and tenants create a personalized, legally binding contract that protects the rights of both parties while clearly establishing their obligations under the lease agreement. A commercial lease agreement is a legally binding contract entered into between a landlord and a tenant renting a property for commercial purposes. Commercial lease agreements also go by other names including: Business rental agreements Business lease agreements Commercial lease contracts Office lease contracts Office lease agreements Commercial property lease agreements Commercial real estate lease These leases can be used when a landlord rents out any type of commercial property including but not limited to: Offices Warehouses Retail spaces Industrial spaces Factories Workshops Restaurants Healthcare facilities When a commercial lease agreement is created, it should outline the rights and obligations of all parties, any limitations on the use of the commercial space and the duration of the lease agreement. The more detailed information that is included, the less chance there is of disputes arising and the easier it will be to determine an appropriate resolution when an issue does come up. A commercial lease agreement is used any time commercial space, such as an office building, is rented. The lease agreement ensures both the landlord and tenant understand what is expected of them. Because the contract is legally binding, it also gives both a landlord and tenant legal rights and the ability to pursue a remedy in court if either party violates the agreement. Landlords usually create a commercial lease agreement, which tenants can review and sign (or negotiate the terms of if they are not satisfied with the agreement as the landlord has drafted it). If a landlord does not create a commercial lease agreement, tenants can draft their own document, negotiate on its provisions and ask the landlord to sign it before the tenant officially occupies the premises. Anyone involved in either side of the commercial property rental transaction must be sure they have signed a written lease before a tenant moves into a rented space. That way, there’s no question of how the real estate transaction will unfold—and the risk of problems arising will be reduced. The parties involved in a commercial agreement typically include: The landlord who owns the commercial space The tenant Since commercial spaces are often used by businesses, it can be somewhat complicated to determine exactly who is a party to the agreement. Some businesses, like corporations, exist as their own legal entities entirely separate from their owners. These businesses can enter into legally binding contracts—including lease agreements. So, a company itself could be a tenant. However, landlords want to be sure they are getting paid, and there’s a risk if the lease is signed by a company that fails. A landlord may require a person to cosign or guarantee a commercial lease agreement unless the business renting it is well established, has a good business credit score, and has plenty of income and assets to cover rental costs. Many different clauses should be included in a commercial lease agreement. These include the following: The contact details of all parties including the landlord and tenant(s) The location of the commercial property being rented The rent amount and payment instructions including the due date The length of the lease When the lease starts and ends Whether the lease is renewable The amount of the security deposit and details about when and why the deposit may be returned or not be returned The amount of space available The type of lease (a gross lease, a net lease, or a triple net lease) The allowable use of the property If taxes, utilities or insurance are the responsibility of the tenant Any restrictions on what tenants can and can’t do with the property Any restrictions on subletting or assigning the property There may be other clauses to include depending on the specifics of the landlord/tenant relationship. However, these are the basic components of a commercial lease agreement that should typically be included in any commercial lease template. Commercial leases can be broadly grouped into three categories, which relate to who covers expenses. A gross lease. A gross lease is a lease that requires the tenant to cover only rent. The landlord is responsible for everything else, including maintenance and property taxes. While most residential leases are gross leases, this is not the case for commercial leases which are often net leases or triple net (net-net-net) agreements. A net lease. With a net lease, the tenant bears some costs on top of the rent, such as property taxes or insurance. The contract should specify what other operating costs of the property the landlord is responsible for. A triple net (NNN) lease. With a triple net lease, tenants are responsible for 100% of operating costs on top of the rent they owe. This includes maintenance, repairs, property taxes, insurance and rent paid to the landlord as well. It is important for a commercial lease agreement to clearly establish whether a lease is a gross lease, a net lease or a triple net lease. A commercial lease template can be a great tool to help you draft a contract when you plan to rent out commercial space. But there is no substitute for legal advice, especially on a contract that is legally binding and that could have a monetary value of thousands or even tens of thousands or more over the course of the year. It’s always best to talk with an experienced attorney for help before drafting or signing a commercial lease so you can make sure the document is reasonably favorable to you and contains clauses that protect your rights. There is no minimum or maximum term for a commercial lease set by law. Landlords and tenants can determine on their own how long a lease term should be. Most commercial leases last for at least a year for practical reasons, and some last for many years as companies may not want to get established in a retail location or warehouse facility only to have to relocate. Commercial leases could be gross, net or triple net. With a gross lease, the tenant is only responsible for rent and the landlord covers everything else like repairs and property taxes. This is most similar to a residential lease. With a net lease, the tenant is responsible for rent and some additional operating expenses as defined in the lease agreement. And with a triple net lease, the tenant is responsible for virtually all expenses, including repairs and property taxes on the rented space. Assigning a commercial lease means the original tenant transfers their rights and obligations under the lease agreement to a new tenant. In some cases, you may be able to assign a commercial lease but in other circumstances, your contact with the original landlord may specify that this is not allowed. If you expect you will need to assign your lease in the future, you should talk with an experienced real estate lawyer to find out your options. Was this article helpful? The California commercial lease agreement is a contract used specifically to rent commercial spaces to businesses. This written document describes the terms and conditions associated with renting industrial spaces, retail stores, and office space. This type of lease is often more complicated than a standard residential lease. A commercial lease agreement is a legally binding contract between a landlord who owns a commercial property and a tenant who wishes to rent the commercial property with the intention to operate a business. The commercial property being rented generally falls into a retail, office or industrial space category. Three basic types of commercial leases exist. Each one has positive and negative aspects for the landlord and tenant. The three variations of commercial leases are defined as: Gross Lease – also known as a full service lease, this type of agreement is considered to be tenant-friendly. In this situation, the tenant pays a predetermined amount for monthly rent. The landlord uses these funds to pay for related property expenses, also known as “nets.” Nets include taxes, insurance and common area expenses. Triple Net (NNN) Lease – favorable type of lease for the landlord, this type of agreement requires the tenant to pay all taxes, insurance and common area expenses associated with the property, in addition to their base rent amount. Modified Gross Lease – this type of agreement serves as a compromise between a gross lease and triple net lease. In a modified gross lease, the landlord and tenant negotiate which nets each party is responsible to pay. Commercial lease agreements can have a significant impact on the financial well-being of all parties involved. It is important that the landlord and tenant fully understand and agree to the terms of the lease proposed prior to signing it into a legally binding document. Required Disclosures for a AgreementThis Commercial Lease Agreement in California Disclosures that must be included in a commercial lease agreement vary depending on individual state regulations. This section lists all disclosures that should be addressed in a commercial lease agreement in ("Lease") is made and effective [Date], by and between [Landlord] ("Landlord") and [Tenant] ("Tenant").Landlord is the state owner of California: Asbestos Disclosure: The landlord land and improvements commonly known and numbered as [Address of any property built prior to 1979 must disclose whether asbestos is known to be contained in Building] and legally described as follows (the structure or on the premises. This notice must indicate the specific location of the asbestos on the property and the necessary procedures to follow to prevent exposure to the hazardous material."Building"):