Commercial Lease – Overview

A commercial lease governs the terms between the tenant and landlord of a lease agreement. Bargaining power is typically skewed towards the landlord with difficult to calculate multi-year rent clauses that include the concepts of base rent as well as rent for common areas and services, strict rules that can result in default, and uncapped indemnities, wrapped in formal legal language, all of which makes tenant-side negotiations a challenge.

The main sections of the lease include:

  • (1) General contract terms (Parties, Background, Consideration, Description of the leased premises, etc.);
  • (2) Rent (Compensation);
  • (3) Repairs, maintenance, agreed-to renovations;
  • (4) Damage, default;
  • (5) Insurance;
  • (6) Term, termination; and
  • (7) Liability and indemnity.

Use keywords like “Insurance”, “Assignment”, “Termination”, “Damage”, and so on in the search filter in order to identify key clauses relating to these sections.

We have provided a commercial lease series of documents within Clausehound’s Document Assembly Tool, and a special series of lease-related articles on this Clausehound blog site.

Written by Rajah. Rajah Lehal is Founder and CEO of Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.