A business premises lease agreement is a contract that binds the landlord and a business in a property contract. Each business lease agreement will be different from the next, as it is written and designed to the premises in question. Despite being different, there are some legal sections that must be clarified and discussed in each contract so that both parties agree on the terms.
Effective Date and Parties
A business premises lease agreement will start by outlining the participating parties in the lease agreement. For example, it will outline the name and contact information of the landlord, along with the tenant business and current contact information for each party. The signing date should also be included near the parties’ information so that you know when the agreement is legal and who is involved. The parties will need to sign the agreement in spaces provided at the end of the lease agreement.
Terms and Conditions
The terms and conditions of the lease agreement should follow the introduction section. The terms include the leasing dates and whether the lease period is monthly, annual or indefinite. The terms should identify that the landlord shall have the premises ready on the start date of the lease and that the lease payments will be cut down if the premises are not ready on the agreed-upon lease start date. Next to the lease period, include information about the renewal terms for the business renting the space.
The monthly rental fees should be outlined in the agreement so that the business knows exactly how much it needs to pay the landlord for the premises on a monthly basis. The payment information will be provided in the contract, i.e., whether payment is by direct deposit or check. Any security deposits required for the space will also be included in the rental fee section.
Repairs and Alterations
The agreement will outline any repairs or alterations that need to be made to the space, whether internal or external. Examples include repairing flooring, walls, ceilings or leaking water pipes. The agreement will also discuss whether it is the landlord's or the tenant’s responsibility to make the repairs.
Insurance and Property Taxes
Property insurance and property tax must be addressed in the business lease agreement. While the tenant is commonly responsible for insuring all of the items in the business office or on the rented premises, it is often the landlord who is responsible for paying the property tax, as the landlord is the original owner of the premises. Read this section of the agreement in detail to ensure you know for what you are responsible.
Some business rental agreements will include utilities in the rental fees, while others will have utilities paid separately. Determine whether the tenant or the landlord is responsible for paying utilities, such as water, electricity, gas, telephone services and other related services for the space.