How to Write a Commercial Lease Agreement

A commercial lease is the contract for renting business space — an office, shop, warehouse, or unit. Unlike residential leases, commercial leases are heavily negotiated and far less regulated, which means the written terms carry all the weight. Getting them right protects both landlord and tenant from expensive surprises.

Our free commercial lease agreement template is written as a triple net (NNN) lease and covers the sections below.

1. Describe the premises and permitted use

Identify the exact space being leased (address, unit, square footage) and state what the tenant may use it for. A clear permitted-use clause matters more in commercial leases — it stops a space rented as an office from becoming, say, a restaurant.

2. Set the term and any renewal option

Commercial terms are often multi-year. State the start and end dates and whether the tenant has an option to renew (and on what terms). Renewal options are valuable to tenants and worth negotiating up front.

3. Base rent, increases, and deposit

State the base rent, when it is due, late fees, and any scheduled increases (for example, an annual percentage bump). Include the security deposit amount and the conditions for its return.

4. Understand triple net (NNN) expenses

This is the biggest difference from a residential lease. In a triple net lease, the tenant pays base rent plusthe three "nets":

• property taxes,
• building insurance, and
• operating and maintenance costs.

This shifts most running costs to the tenant and gives the landlord a predictable net return. Other structures exist — a gross lease has the landlord cover most expenses — so state clearly which costs each side bears. Adjust the expense section to match your deal.

5. Maintenance, alterations, and assignment

Say who maintains what, whether the tenant may make improvements (and who owns them at the end), and whether the tenant can assign the lease or sublet. These clauses prevent disputes over repairs and over what happens if the tenant's business changes.

6. Default, remedies, and signatures

Define what counts as default (missed rent, breach of terms), the cure period, and the landlord's remedies. Then both parties sign. Once signed it is binding; electronic signatures are valid for commercial leases in most places — see are electronic signatures legally binding?

Renting a home instead? Use the residential lease guide — the rules and protections are quite different.

Disclaimer: This article is for general informational purposes only and is not legal advice. Commercial leases are significant financial commitments; consider having a qualified lawyer review the lease before signing.