Modified Gross Lease Agreement Template

Modified Gross Lease Agreement Template

This Modified Gross Lease Agreement (“Lease”) is made as of [Date of Lease].

1. Parties and Premises

Landlord:
Full Legal Name: [Landlord Full Legal Name]
Business Name (if applicable): [Landlord Business Name]
Address: [Landlord Street Address]
City, State/Province, ZIP/Postal Code, Country: [Landlord City/State/ZIP/Country]
Phone: [Landlord Phone Number]
Email: [Landlord Email Address]

Tenant:
Full Legal Name: [Tenant Full Legal Name]
Business Name (if applicable): [Tenant Business Name]
Address: [Tenant Street Address]
City, State/Province, ZIP/Postal Code, Country: [Tenant City/State/ZIP/Country]
Phone: [Tenant Phone Number]
Email: [Tenant Email Address]

Premises:
Property Address: [Property Street Address]
City, State/Province, ZIP/Postal Code, Country: [Property City/State/ZIP/Country]
Unit/Suite/Description: [Premises Description]
Approximate Rentable Area: [Premises Area]

The Premises are part of the real property commonly known as [Building or Center Name] (the “Property”).

2. Term

Lease Commencement Date: [Commencement Date]
Rent Commencement Date (if different): [Rent Commencement Date or “Same as Lease Commencement Date”]
Lease Expiration Date: [Expiration Date]

The “Term” of this Lease begins on the Lease Commencement Date and ends on the Lease Expiration Date, unless earlier terminated or extended under this Lease.

3. Base Rent

3.1 Base Rent

Tenant will pay to Landlord base rent (“Base Rent”) for the Premises as follows:

Base Rent per [Month/Year]: [Base Rent Amount and Currency]
Payment Frequency: [Monthly / Other]

Unless otherwise stated, Base Rent includes the Landlord’s share of ordinary building operating expenses identified in Section 4.

3.2 Payment

Tenant will pay Base Rent in advance, without deduction or setoff, on or before the [Day] day of each [Payment Period] during the Term to the address or account designated by Landlord in writing.

If the Term begins or ends on a day other than the first or last day of a calendar month, Base Rent for that partial month will be prorated based on the number of days in the month.

4. Operating Expenses and Modified Gross Structure

This Lease is a “modified gross” lease. Some operating expenses are included in Base Rent, while others are paid separately or in part by Tenant as Additional Rent.

4.1 Landlord-Included Operating Expenses

The following Property operating expenses are included in Base Rent and are the Landlord’s responsibility (except for any increases allocated to Tenant under Section 4.3):

• Real property taxes and assessments: [Included / Partially Included / Not Included].

• Building insurance premiums: [Included / Partially Included / Not Included].

• Common area maintenance (CAM) for the Property, including cleaning, lighting, landscaping, snow removal, and general repairs: [Included / Partially Included / Not Included].

Describe any specific inclusions or exclusions here:
[Detailed description, e.g., “Base Rent includes routine CAM and building insurance, but excludes real property tax increases and separately metered utilities.”]

4.2 Tenant-Paid Operating Expenses

Tenant will pay directly, or reimburse Landlord for, the following expenses (“Tenant-Paid Expenses”), as Additional Rent:

• Utilities serving the Premises that are separately metered or billed: [Electricity / Gas / Water / Sewer / Trash / Other].

• Janitorial services for the interior of the Premises: [Tenant Responsibility / Landlord Responsibility].

• Other specified operating costs: [Describe any additional Tenant-paid items].

4.3 Expense Increases and Pass-Throughs (If Used)

If the parties agree that Tenant will share in increases to certain operating expenses above a “base year” or fixed amount, complete this section:

• Base Year (if applicable): [Base Year, e.g., “Calendar year 20__”].

• Expenses Subject to Increases: [Property taxes / Insurance / CAM / Other].

Tenant will pay [Tenant’s Share or Formula, e.g., “Tenant’s proportionate share based on rentable area”] of any increase in these expenses over the amounts for the Base Year, as Additional Rent. Landlord will provide an annual statement showing calculations, and Tenant will pay any amount due within [Number] days after receiving the statement.

5. Utilities and Services

5.1 Utilities

Unless stated otherwise in Section 4, Tenant is responsible for: [List Tenant-paid utilities] and will pay such utilities directly to the service providers or reimburse Landlord if Landlord is billed.

If any utilities serving the Premises are not separately metered, Tenant will pay a fair share allocated by Landlord based on floor area, usage estimates, or another reasonable method described here: [Allocation Method].

5.2 Janitorial and Other Services

Unless otherwise agreed in writing:

• Landlord-Provided Services: [e.g., “Common area cleaning, exterior maintenance”].

• Tenant-Provided Services: [e.g., “Interior janitorial, window cleaning inside the Premises”].

6. Security Deposit

Security Deposit Amount: [Security Deposit Amount and Currency]

Tenant will pay the Security Deposit to Landlord on or before the Lease Commencement Date. Landlord may hold the Security Deposit as security for Tenant’s performance of Tenant’s obligations under this Lease.

After the Term ends and Tenant has vacated the Premises and complied with this Lease, Landlord will return any remaining Security Deposit, less lawful deductions for unpaid sums or damage beyond ordinary wear and tear, within the period required by applicable law.

7. Use of Premises

Permitted Use: [Describe Permitted Use, such as “general office use,” “retail store selling [Type of Goods],” “professional services,” etc.].

Tenant will:

• Use the Premises only for the Permitted Use and lawful activities related to it.

• Comply with all applicable laws, regulations, and codes.

• Comply with reasonable building rules and regulations provided or updated by Landlord in writing.

• Avoid activities that create a nuisance or unreasonable disturbance to other occupants of the Property.

8. Maintenance and Repairs

8.1 Tenant Responsibilities

At Tenant’s expense, Tenant will:

• Maintain the interior, non-structural portions of the Premises in clean, safe, and good condition, including interior walls, doors, ceilings, floor coverings, interior glass, and Tenant’s fixtures and equipment.

• Promptly repair damage to the Premises caused by Tenant, Tenant’s employees, contractors, or visitors, beyond ordinary wear and tear.

8.2 Landlord Responsibilities

Subject to the cost allocations in Sections 3 and 4, Landlord will:

• Maintain the structural elements of the building, including foundation, roof structure, and exterior walls (excluding interior finishes and damage caused by Tenant).

• Maintain and repair common areas of the Property, including parking areas, driveways, walkways, landscaping, and shared building systems serving multiple tenants, such as common plumbing, electrical, and HVAC systems, unless otherwise stated.

9. Alterations and Improvements

Tenant may not make structural alterations or major changes to the Premises without Landlord’s prior written consent.

Non-structural interior alterations or improvements may be made by Tenant with Landlord’s consent where required and in compliance with building rules and applicable law.

Unless otherwise agreed in writing:

• Tenant’s movable trade fixtures, furniture, and equipment remain Tenant’s property and may be removed at the end of the Term, provided Tenant repairs any damage caused by removal.

• Built-in fixtures and improvements that are permanently attached to the Premises generally remain with the Premises at the end of the Term.

10. Insurance and Indemnity

10.1 Tenant Insurance

Tenant will maintain, at Tenant’s expense, during the Term:

• Commercial general liability insurance covering bodily injury and property damage occurring in or about the Premises, with minimum limits of [Liability Limit] per occurrence and [Aggregate Limit] aggregate, or other limits reasonably required by Landlord.

• Property insurance covering Tenant’s personal property, inventory, equipment, and trade fixtures located in the Premises.

Tenant will provide Landlord with certificates of insurance and name Landlord (and, if requested, Landlord’s mortgagee) as an additional insured on Tenant’s liability policy.

10.2 Landlord Insurance

Landlord will maintain property insurance for the building and common areas in types and amounts selected by Landlord. The cost of such insurance may be treated as a Landlord-included expense or as part of any expense-sharing mechanism under Section 4.

10.3 Indemnity

To the extent permitted by applicable law, Tenant will indemnify and hold harmless Landlord from claims, damages, and expenses arising out of Tenant’s use or occupancy of the Premises or Tenant’s activities on the Property, except to the extent caused by Landlord’s negligence or willful misconduct.

11. Taxes

Landlord is responsible for payment of real property taxes and assessments on the Property to the extent included in Base Rent and Landlord-included expenses.

If the parties agree that Tenant will share in tax increases, that sharing mechanism is described in Section 4.3.

Any taxes or assessments separately imposed on Tenant’s personal property, signage, or specific Tenant improvements will be paid directly by Tenant or reimbursed to Landlord if Landlord pays them.

12. Assignment and Subletting

Tenant may not assign this Lease, sublet all or part of the Premises, or otherwise transfer its interest in this Lease without Landlord’s prior written consent, except as otherwise allowed in a separate written provision.

Any approved assignment or sublease will not release Tenant from Tenant’s obligations under this Lease unless Landlord expressly agrees in writing.

13. Default and Remedies

13.1 Tenant Default

Tenant will be in default under this Lease if:

• Tenant fails to pay Base Rent, Additional Rent, or any other amount due within [Number] calendar days after receiving written notice of non-payment from Landlord; or

• Tenant materially breaches any other term of this Lease and does not cure the breach within [Number] calendar days after receiving written notice from Landlord, or within a reasonable additional time if the breach cannot reasonably be cured within that period but Tenant promptly begins and diligently pursues cure.

13.2 Landlord Remedies

Subject to applicable law and required notice and cure periods, if Tenant is in default, Landlord may:

• Terminate this Lease and regain possession of the Premises;

• Re-enter and relet the Premises, applying net rental income against amounts owed by Tenant;

• Seek damages, unpaid amounts, and other relief available at law or in equity.

14. Casualty and Condemnation

14.1 Casualty

If the Premises are damaged by fire or other casualty:

• Landlord will determine within a reasonable time whether the damage can reasonably be repaired within a practical period.

• If repairs are feasible, Landlord may repair the damage, and Base Rent may be fairly reduced if Tenant’s use of the Premises is materially affected during repairs, according to the degree of loss of use.

• If the Premises are substantially damaged and cannot reasonably be repaired in a practical timeframe, Landlord or Tenant may have the right to terminate this Lease by written notice, effective as stated in that notice.

14.2 Condemnation

If all or a substantial part of the Premises is taken by eminent domain or similar authority, this Lease may terminate as of the date of taking or as otherwise stated in a written notice.

Any award for the taking will generally belong to Landlord, except amounts specifically awarded to Tenant for Tenant’s personal property, trade fixtures, or relocation expenses.

15. Notices

All notices under this Lease must be in writing and delivered to the addresses or email addresses for Landlord and Tenant listed in Section 1, unless a party provides updated contact details in writing.

Permitted delivery methods include:

• Personal delivery

• Mail or courier service

• Email, if the receiving party regularly uses email and agrees to receive notices electronically

16. Governing Law

This Lease is governed by the laws of [State/Province, Country], without regard to conflict-of-law rules, unless the parties specify a different governing law here: [Alternative Governing Law].

17. Entire Agreement and Amendments

This Lease contains the entire agreement between Landlord and Tenant regarding the Premises and supersedes all prior or contemporaneous oral or written agreements concerning the same subject.

Any amendment or modification of this Lease must be in writing and signed by both Landlord and Tenant.

If any provision of this Lease is found invalid or unenforceable, the remaining provisions will continue in effect to the extent permitted by law.

18. Signatures

By signing below, Landlord and Tenant agree to be bound by the terms of this Modified Gross Lease Agreement.

Landlord:
Signature: _______________________________
Printed Name: [Landlord Full Legal Name or Authorized Signer]
Title (if business): [Title]
Date: [Date Signed by Landlord]

Tenant:
Signature: _______________________________
Printed Name: [Tenant Full Legal Name or Authorized Signer]
Title (if business): [Title]
Date: [Date Signed by Tenant]

Witnesses (If Used)

Witness 1:
Signature: _______________________________
Printed Name: [Witness 1 Full Legal Name]
Address: [Witness 1 Address]
Date: [Date Signed by Witness 1]

Witness 2 (if required):
Signature: _______________________________
Printed Name: [Witness 2 Full Legal Name]
Address: [Witness 2 Address]
Date: [Date Signed by Witness 2]

Notary Acknowledgment (If Required)

State/Province of [State/Province]
County of [County]

On [Notarization Date], before me, [Notary Full Name], a Notary Public, personally appeared [Landlord Full Legal Name or Authorized Signer] and [Tenant Full Legal Name or Authorized Signer], who proved their identities on the basis of satisfactory evidence and acknowledged that they executed this Modified Gross Lease Agreement for the purposes stated in it.

Notary Public Signature: _______________________________
Notary Public Printed Name: [Notary Full Name]
My Commission Expires: [Commission Expiration Date]
Notary Seal: ☐