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Commercial Lease Agreement Template – California
Document a CA business lease with clear rent, responsibilities, and handover terms.
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Commercial Lease Agreement Template
Core Parties and Premises.
This Commercial Lease Agreement (the “Agreement”) is made and entered into as of [Date], by and between:
Landlord: [Full Legal Name], having a mailing address of [Address], hereinafter referred to as the “Landlord.”
Tenant: [Full Legal Name], having a mailing address of [Address], hereinafter referred to as the “Tenant.”
The Landlord and the Tenant may each be referred to herein as a “Party” and collectively as the “Parties.”
a. Premises: The Landlord hereby leases to the Tenant the commercial property (“Premises”) situated at [Full Property Address and Description (suite number, floor, etc.)].
b. Permitted Use: The Premises shall be used exclusively for [Describe Tenant’s Business/Authorized Use]. Any other use is prohibited without the prior written consent of the Landlord.
Term and Possession.
a. The term of this Agreement (“Term”) shall commence on [Commencement Date] and shall expire on [Expiration Date], unless earlier terminated under the provisions herein.
b. If the Tenant remains in possession of the Premises after the expiration of the Term without executing a new lease, such possession shall be deemed a month-to-month tenancy subject to all the same terms of this Agreement except as modified by the Landlord in writing.
Money Terms.
a. Rent: The Tenant shall pay monthly rent in the amount of [Rent Amount in USD], due on or before the [Due Date] day of each month, payable to the Landlord by [Payment Method].
b. Late Fee: If rent is not received within [Grace Period] after the due date, a late fee of [Late Fee Amount or Percentage] may be charged.
c. Proration: If the commencement date does not fall on the first day of a calendar month, rent for the partial month shall be prorated based on a [30-day month / actual days in month] basis.
Security and Charges.
a. Security Deposit: The Tenant shall pay a security deposit in the amount of [Security Deposit Amount in USD] upon execution of this Agreement or before taking possession of the Premises.
b. Application of Deposit: The security deposit shall be held by the Landlord to cover damages, unpaid rent, or other charges related to the Tenant’s breach of this Agreement.
c. Return: The return of the security deposit (or any remaining balance) shall be governed by applicable law and this Agreement.
Operations and Compliance.
a. Use and Compliance: The Tenant shall comply with all federal, state, and local laws, regulations, and ordinances applicable to the Tenant’s use of the Premises.
b. Licenses and Permits: The Tenant is responsible for obtaining and maintaining all necessary licenses, permits, or other approvals for its operations.
c. Utilities: Unless otherwise specified, the Tenant shall arrange and pay for utilities required for operations, including electricity, gas, water, trash removal, internet, and telephone.
Care of Premises.
a. Maintenance: The Tenant shall, at its own expense, keep the Premises in clean and orderly condition and promptly make non-structural repairs necessary due to the Tenant’s use or occupancy.
b. Structural Repairs: The Landlord shall be responsible for structural repairs to the roof, foundation, and exterior walls, except to the extent caused by Tenant.
c. Alterations: Any alterations or improvements by the Tenant must receive prior written consent from the Landlord and shall comply with applicable law.
Risk Allocation.
a. Insurance: The Tenant shall maintain commercial general liability insurance with coverage of at least [Minimum Coverage Amount], naming the Landlord as an additional insured.
b. Real Estate Taxes and Operating Expenses: The Parties agree the lease structure is [Gross / Modified Gross / Net / Triple Net (NNN)]. Any additional rent obligations are as stated in this Agreement or [Addendum A].
c. Release to Extent of Insurance: Each Party releases the other to the extent of insurance coverage for property damage claims covered by such insurance.
Enforcement and End-of-Term.
a. Assignment/Subletting: The Tenant shall not assign this Agreement or sublet any portion of the Premises without the Landlord’s prior written consent. Any unauthorized assignment or sublet shall be void and constitute a default.
b. Default: The Tenant shall be in default if the Tenant fails to pay rent or other charges when due, or breaches any material term and fails to cure within [Cure Period] after notice.
c. Remedies: Upon default, the Landlord may terminate this Agreement, retake possession, and pursue other remedies available at law or in equity.
d. Casualty: If the Premises are damaged by casualty so it becomes substantially unusable, rent shall abate proportionately during untenantability and either Party may terminate if repairs cannot be completed within [Time Frame].
e. Condemnation: If a governmental authority takes all or a substantial part of the Premises such that it cannot be used for Tenant’s purposes, this Agreement shall terminate as of the date of the taking.
General Terms.
a. Governing Law and Venue: This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any legal action shall be filed in the state or federal courts located in [County/City], California.
b. Notices: Any notice required or permitted shall be in writing and deemed properly given when delivered personally, sent by certified or registered mail (return receipt requested), or sent by a recognized courier service to the addresses set forth above (or as updated by notice).
c. Entire Agreement; Severability: This Agreement, including any addenda, is the entire agreement. If any provision is invalid, the remaining provisions remain in effect.
Module 1 - Deal Points Summary.
The table below forms part of the Agreement.
Item | Agreement Term |
Premises | [Full Property Address and Description (suite number, floor, etc.)] |
Permitted Use | [Describe Tenant’s Business/Authorized Use] |
Lease Term | [Commencement Date] to [Expiration Date] |
Base Monthly Rent | [Rent Amount in USD] |
Rent Due Date / Method | [Due Date] / [Payment Method] |
Security Deposit | [Security Deposit Amount in USD] |
Lease Structure | [Gross / Modified Gross / Net / Triple Net (NNN)] |
Utilities Responsibility | [Landlord / Tenant / Split as follows: ____] |
Insurance Minimum | [Minimum Coverage Amount] |
Notice Addresses | Landlord: [Address] / Tenant: [Address] |
Module 2 - Premises Condition Evidence.
a. Condition Evidence: The Parties agree the condition of the Premises at delivery and surrender may be evidenced by [Photos/Video/Inspection Report] identified as [File Names/Links/Identifiers].
b. Included Items: Landlord-provided fixtures and items included in the Premises are: [List of included fixtures/items].
Module 3 - Key Dates Timeline.
a. Key Dates: [Possession Date], [Rent Commencement Date], [Option Exercise Deadline], [Move-Out Date].
b. Any changes to key dates must be in a written amendment signed by both Parties.
Module 4 - Site Factors and Conditions.
a. Site Factors: The Parties acknowledge the following site factors may affect operations: [HVAC hours], [loading access], [trash service], [after-hours access], [parking allocation].
b. Tenant shall comply with any reasonable building or property rules provided to Tenant in writing.
Signatures.
IN WITNESS WHEREOF, the Parties hereto have executed this Commercial Lease Agreement on the dates indicated below.
Landlord: [Landlord Name]
Signature: ______________________________
Date: ______________________________
Tenant: [Tenant Name]
Signature: ______________________________
Date: ______________________________
Reviewed By (Property Manager): [Name]
Signature: ______________________________
Date: ______________________________
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Commercial Lease Agreement Template – California
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For quick answers, scroll below to see the FAQ.
Click below for detailed info on the template.
For quick answers, scroll below to see the FAQ.
California Commercial Lease Agreement Template FAQ
What should I include in the permitted use clause for a California commercial lease?
Describe the business activity clearly enough to prevent surprises while leaving room for normal growth. State the core use, any secondary uses you anticipate, and operational details that matter to the property, such as hours, deliveries, customer traffic, or on-site assembly. If the property has written building rules, the lease can reference them so expectations stay consistent. If the tenant may expand services, define an outer boundary of acceptable use so future changes do not require repeated written approvals.
How do I document the condition of the premises at move-in to reduce disputes later?
Condition disputes usually come down to proof. Reference a set of photos, video, and a simple inspection record, then identify those files by name or link in the lease. Capture high-wear areas like floors, paint, restrooms, doors, storefront, and any included equipment, and note existing damage or exclusions. If a deposit deduction or repair claim is later disputed, both parties can point to the same evidence set rather than arguing about an informal walkthrough.
What is the day-to-day difference between gross and net rent structures?
Gross structures typically bundle more building costs into the base rent, while net structures separate base rent from additional items like taxes, insurance, and common area maintenance. The practical difference is budgeting and invoice variability: net leases can involve estimates and periodic reconciliations, while gross leases are usually more predictable month to month. Either way, utilities are often handled separately, so the lease should say who pays, how billing is handled, and what happens if service is interrupted.
How can I cover tenant improvements without turning the lease into a construction contract?
Keep the lease focused on approvals, responsibility, and timing. Address whether improvements are allowed, what plans require written consent, who obtains permits, who carries insurance during the work, and what happens to fixtures at the end of the term. If the landlord contributes funds, state the amount, what costs qualify, and what documentation is required for reimbursement. A short list of key dates and a clear approval process often prevents delays without heavy construction drafting.
How can the lease restrict subletting but still give the tenant flexibility if the business changes?
A consent-based transfer clause can balance control and flexibility. Require advance written consent, basic information about the proposed transferee, and confirmation that the new occupant will comply with permitted use and insurance requirements. State whether the original tenant remains liable after a permitted transfer, and how any rent premium is handled if the sublease rate exceeds the tenant's rent. This gives the tenant a workable process while protecting the landlord from surprise occupants.
What should a holding over clause accomplish beyond saying the tenancy is month-to-month?
A strong holding over clause sets the rent rate during the holdover period and confirms that key obligations continue, including use limits, insurance, and care of the premises. It should clarify that holdover is not a renewal and does not create a longer term without a signed amendment. These details matter because disputes often arise when a tenant needs a short extension and the parties later disagree about pricing and move-out timing.
Is there a faster way to draft a complete commercial lease without overlooking key terms?
Speed comes from structuring the deal points first: premises description, term dates, rent amount and method, expense allocation, maintenance lines, insurance, and default procedures. AI Lawyer can generate a draft quickly once those decisions are made, and then you can tailor the language to match how the building actually operates. Before signing, do a consistency pass so the rent structure, additional rent clause, and remedies provisions align with each other.
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