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Home Resources Real Estate What Is a Commercial Lease Agreement? All You Need to Know

What Is a Commercial Lease Agreement? All You Need to Know

Emily Crowley

Published September 15, 2021 | Written by Emily Crowley

A landlord and tenant sign a lease for a commercial property

A commercial lease agreement is a contract between a landlord and a tenant that allows the tenant to operate a business on the landlord’s premises for rent.

If the tenant plans to operate a business on the landlord’s property, this document allows both parties to formalize that agreement and their relationship through a legally recognized and binding contract.

Commercial lease agreements are also known as:

  • Business Leases
  • Industrial Leases
  • Office Space Agreements
  • Standard Commercial Leases

‌How is a commercial lease different from a residential lease?

Unlike a residential lease agreement, a commercial lease agreement is intended for business purposes rather than for residential living.

The leased property can be a simple office, an entire building, an independent retail store, a new restaurant, or even a large warehouse for industrial purposes such as a manufacturing factory or self-storage facility.

If the leased property is a part of a larger building, the landlord may address unique concerns and duties about common areas such as parking spaces or garbage disposal.

When is a Commercial Lease Agreement Most Commonly Used?

Commercial lease agreements can be used to rent any space that will be used for business purposes, such as:

  • Accounting Firm
  • Factory
  • Medical Clinic or Health Care Facility
  • Restaurant
  • Shopping Mall Store
  • Warehouse

In addition to traditional businesses, commercial leases can also be used to rent out private land.

What is a landlord responsible for in a commercial lease?

Typically, the landlord handles structural repairs, which means they make sure the leased premises is usable.

For instance, the landlord is responsible for fixing the walls, roof, foundation, and other structural elements holding the premises together.‌‌

In contrast, the tenant is responsible for repairs and maintenance of mechanical and decorative features, such as plumbing and windows.

How long do commercial leases last‌?

On average, most commercial leases last three to five years. They can last anywhere from one to ten years, although short-term leases are less common. Most landlords want to build long-term relationships with their tenants, so they prefer leases that last at least three years.

Where can I get a commercial lease agreement?

To create a commercial lease agreement, you can have a lawyer draft one for you or you can do it yourself using our commercial lease agreement builder and free template.

Emily Crowley

Emily Crowley

Estate Planning Editor

Emily Crowley is a staff writer at Legal Templates. Her background in nonprofit motivates her to improve access to legal advice in underserved groups, especially in end-of-life wishes and estate...

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In This Article

  • When is a Commercial Lease Agreement Most Commonly Used?
  • What is a landlord responsible for in a commercial lease?
  • How long do commercial leases last‌?
  • Where can I get a commercial lease agreement?

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