Commercial Property Lease Agreement

Commercial Property Lease Agreement: a practical guide

A Commercial Property Lease Agreement records the terms for renting a property or part of a property for business or other commercial use. It helps the landlord and tenant put their shared understanding in writing, including the space, rent, lease period, and responsibilities.

What it's for

Use this document when a landlord rents commercial space to a tenant, such as an office, shop, workshop, or other business premises. Describe the property clearly, including any areas, fixtures, or shared facilities the tenant may use. If a room in a home is being rented, a Residential Lease Agreement may fit better.

Before preparing the agreement, decide how the space may be used, when the tenant may occupy it, how rent and other costs will be handled, and who will take care of repairs and upkeep. Put important exceptions or arrangements in writing, including terms the parties agree to add under “Additional Terms & Provisions.”

A written agreement can help both sides refer back to the same terms during the tenancy. Rules for signing, witnesses, notarization, registration, notice periods, and required wording differ between countries and regions, so check local requirements or ask a qualified lawyer when much is at stake.

Who uses it

• A property owner renting an office, shop, or other business premises to a company.
• A small business renting space from a private landlord.
• A company renting commercial premises from another company or property owner.
• A landlord and tenant agreeing on the use of shared areas, such as a corridor, loading area, or parking area.
• A tenant and landlord recording agreed rent, repair, access, or fit-out arrangements for a new commercial tenancy.

Terms to decide on

Property and permitted use

Identify the location and the exact space being rented, including any included fixtures, storage, or shared areas. State the intended business use and any limits or uses that need the landlord’s approval.

Lease period and possession

Write the start date, end date if there is one, and when the tenant may take possession. If the parties expect an extension or renewal, explain how they will discuss and record it rather than leaving expectations unstated.

Rent and payment

State the rent amount, currency, due date, payment method, and where payment should be sent. Explain any agreed changes to rent during the lease and how the parties will confirm them.

Deposit

Record the deposit amount, what it may be used for, and how and when it will be returned or accounted for after the tenancy. Agree how any deductions will be described and documented.

Other property costs

List who pays for utilities, building services, maintenance charges, or other occupancy costs, and explain how shared costs are calculated. Avoid relying on a broad phrase such as “all expenses” without saying what it covers.

Repairs and upkeep

Set out which party handles routine cleaning, minor upkeep, building systems, and repairs. Describe how the tenant should report a problem and how the parties will coordinate access for work.

Changes to the space

Say whether the tenant may install signs, equipment, partitions, or other improvements, and whether permission is needed first. Explain what must be removed or restored when the tenancy ends.

Access, end of lease, and handover

Describe how the landlord may access the premises, how much coordination is expected, and what happens to keys and property at move-out. State how either side may raise an early end to the tenancy and what notice or process the parties intend to follow, subject to local requirements.

Common mistakes

• Describing only the building address when the tenant is renting one suite, floor, room, or defined area. Attach or refer to a clear description of the rented space and shared areas.
• Leaving the permitted use vague. A business activity may affect building operations or require approvals, so specify the agreed use and clarify how a proposed change will be handled.
• Writing a rent figure without its currency, due date, or payment instructions. This can lead to different understandings even when both parties agreed on the amount.
• Failing to say which party pays for utilities, building services, or shared-area upkeep. Name the costs and explain how a tenant’s share will be worked out.
• Treating the deposit as the final month’s rent without writing down that arrangement. Keep the agreed purpose, accounting, and return process clear.
• Assuming a tenant may make alterations or install signs because the premises are for business. Put approval, payment, and end-of-tenancy restoration arrangements in writing.
• Using generic termination or notice wording without checking whether it fits the parties’ circumstances and local requirements.

Before you sign

• Confirm that the property description matches the space the tenant will occupy and use.
• Check that every landlord and tenant party is correctly named and that the person signing for a company is authorized to do so.
• Review the rent, currency, payment date, deposit, and any other property costs together.
• Read the permitted-use, repair, alteration, access, and handover terms carefully.
• Add any agreed exception or special arrangement in clear language, and remove wording the parties do not understand.
• Check local rules for signing, witnesses, notarization, registration, notice periods, or required wording; consult a qualified lawyer if needed.