Draft a Commercial Lease Agreement in 30 Seconds

How to Draft a Commercial Lease Agreement

A commercial lease agreement governs the rental of business premises — an office suite, a retail storefront, a restaurant space, or a warehouse — typically between a property owner (often an LLC) and a business tenant. Unlike a residential lease, it is negotiated around the way a business actually operates and pays, which is exactly where the detail matters. EZdoc lets you describe the deal in plain language and drafts a structured document with the right commercial sections, clauses, and entity signature blocks.

Define the Premises and Permitted Use

Start by identifying the leased premises precisely — building address, suite or unit number, and rentable square footage — because square footage drives both rent and the tenant's share of operating expenses. The permitted use clause is just as important; it limits the tenant to the agreed business so a quiet office tenant cannot turn the space into a noisy workshop. Spell out who may occupy the space and any restrictions on hours, signage, or alterations.

Set Base Rent, Escalations, and Expenses

Commercial rent is usually quoted as base rent per square foot or as a fixed monthly amount, often with an annual escalation schedule so increases are agreed up front rather than fought over later. Decide whether the lease is gross, modified gross, or triple net (NNN). Under a triple net structure the tenant pays a proportionate share of common area maintenance (CAM), property taxes, and insurance on top of base rent, so document that allocation clearly to avoid disputes over operating expenses down the road.

Term, Build-Out, and Assignment

Commercial terms run for years rather than months, so state the term length, the commencement date, and any renewal options. If the tenant needs tenant improvements or a build-out, describe who designs, pays for, and owns the work, and whether there is a rent-free fit-out period. Address assignment and subletting — whether the tenant may transfer the lease or sublet, and whether the landlord's written consent is required — and include insurance and indemnification obligations, which protect the owner against liability arising from the tenant's operations.

Common Mistakes to Avoid

• Leaving the operating-expense structure vague, so it is unclear who pays CAM, taxes, and insurance.
• Omitting the escalation schedule and then having to renegotiate rent every year.
• Using individual signature blocks when the parties are an LLC or corporation that must sign by an authorized officer.
• Forgetting assignment, subletting, and insurance clauses that a commercial tenant and lender will expect.

Get Counsel Review Before Signing

EZdoc gives you a clean, professionally formatted commercial lease draft in seconds, which is a strong starting point for negotiation. Because commercial leases create significant, multi-year obligations, have a licensed real estate attorney review the final terms for your jurisdiction before either party signs.

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