A commercial lease covers space a business occupies: retail, office, warehouse, or industrial. Unlike residential leases, almost nothing is standardized by statute: the parties allocate taxes, insurance, maintenance, and risk by contract, which makes the written terms decisive.
This template produces a complete small-business lease with the market's three standard expense structures: gross, modified gross, and triple net (NNN), plus permitted use, escalations, renewal options, and an optional personal guaranty.
Gross, modified gross, or triple net?
| Structure | Tenant pays | Typical use |
|---|---|---|
| Gross | Base rent plus own utilities | Small offices, executive suites |
| Modified gross | Base rent plus share of expense increases | Multi-tenant office buildings |
| Triple net (NNN) | Base rent plus taxes, insurance, and CAM | Retail, standalone buildings |
A low NNN base rent can cost more than a higher gross rent once taxes, insurance, and common area maintenance are added. Always compare the all-in monthly cost, and ask for the prior year's actual expense figures before signing.
The clauses worth negotiating
- Permitted use and exclusivity: define your use broadly enough to evolve, and in retail, seek an exclusive for your category in the center.
- Personal guaranty: cap it in time (a 'good guy' clause) or amount rather than guaranteeing the whole term.
- Renewal options: options with defined rent protect the location value your business builds.
- Assignment: the right to assign on a business sale, with consent not unreasonably withheld, protects your exit.
- CAM audits: the right to review the landlord's expense records keeps NNN charges honest.
Commercial tenants have fewer protections
Residential tenant protections (habitability warranties, deposit deadlines, eviction notice minimums) generally do not apply to commercial space. Courts hold businesses to the contract they signed. That cuts both ways: the lease can be negotiated freely, and whatever is written will be enforced.
Large or long-term leases deserve professional review
For a multi-year lease that represents a significant share of your operating costs, having a commercial real estate attorney review the final draft is money well spent. This template gives you a solid, complete starting document for that review.
Frequently asked questions
What is CAM and how is my share calculated?
Common area maintenance covers shared spaces: parking, lobbies, landscaping, snow removal. Your share is usually your square footage divided by the building's leasable square footage. Ask for a cap on annual CAM increases.
Should I sign as my LLC or personally?
Sign in the name of the business entity, with your title. Landlords often ask for a separate personal guaranty from the owner; negotiate its scope rather than signing the lease personally.
Can the landlord evict a business the same way as a residential tenant?
Commercial evictions follow their own, usually faster, procedures with fewer defenses. The notice and cure periods in the lease are often the only protection, which is why this template includes explicit cure periods.
Who pays for building out the space?
Negotiable. Landlords commonly offer a tenant improvement allowance or free rent months for build-out. Put any allowance, scope, and delivery condition of the premises in writing before signing.
What happens if my business closes before the term ends?
The entity remains liable for the remaining rent, and any guarantor personally. Options include assignment, subletting with consent, or negotiating a lease buyout with the landlord.