Common terms and clauses in a commercial lease include parties, premises clause, use clause and term clause, explains Nolo. Common terms also cover rent, security deposits, permitted alterations and who is responsible for maintenance.Continue Reading
A commercial lease generally refers to the parties as "Landlord and Tenant" or "Lessor and Lessee," in which the tenant is the lessee, notes Nolo. A business needs to pay attention to this wording because the name used must be its legal name and must include designations such as "LLC" or "Inc." If a business owner puts his own name on a lease, he risks personal liability.
The premises clause explains the space that is for lease and includes the property address and spaces, such as lots, that come with the commercial lease, according to Nolo. The lease also outlines areas such as the parking lot and storage rooms that the business can access. The use clause sets out how the business is to use its leased space and can be extremely broad or very narrow.
Term clauses explain the length of the lease as well as starting and end dates, reports Nolo. They are important for several reasons, one being that even if a business has not begun operations on the first day of its lease, it still needs to meet other lease obligations, such as insurance coverage.Learn more about Real Estate