In California, the type of lease agreement depends on the type of property in question. Anyone renting commercial space needs to use commercial lease forms. These legal documents differ from residential lease agreements and contain specific considerations for the state. Many people seek the help of an attorney to write California commercial lease agreement. But with our commercial lease agreement template for California, you can write the document yourself. However, before writing a commercial lease agreement, read what needs to be included and why it is important for your business.
A California commercial lease agreement is a contract between a landlord and tenant used specifically when letting commercial property intended for business purposes. Examples of such commercial spaces could include industrial properties, retail store locations, or offices. The lease agreement details all the contract’s terms. Once both parties have signed the forms, they become legally binding as per state law and any other applicable laws.
Within the state of California, commercial lease agreements take three unique forms:
· Gross Lease: With these types of commercial lease agreements in California, commercial landlords are responsible for paying for all building maintenance and repairs, real estate taxes, and utilities. The tenant is only responsible for paying rent, so these types of lease agreements favor the tenant.
· Triple Net Lease: These types of agreements are also known as NNN lease documents. With these leases, the tenant is responsible for paying for any building expenses, so they favor the landlord. They are the most common type of agreement for industrial and retail properties that are let to multiple commercial tenants.
· Modified Gross Lease: Modified lease agreements form a perfect compromise for the tenant and landlord – both parties share the cost of property expenses. However, the tenant is still usually responsible for paying for utilities and cleaning fees.
Anyone renting a commercial property needs to write a California commercial lease agreement. As a legally binding contract between the two parties, they are important for clearly disclosing the rights of both the tenant and landlord concerning the premises. Failure to have a lease agreement in place could cause major issues for either party in the future. On the other hand, having a lease agreement in place protects both parties in the case of disputes. Arbitration provisions are also included, which help ensure disputes can resolve without needing to go to court or jury trial.
You should remember — when it comes to drafting a commercial lease, California has several lease agreements types. As such, there can be huge variations between the different documents and forms. Nevertheless, all contain the following basic information:
For a commercial lease agreement to be valid, it must contain specific disclosures along with the lease’s general terms. It’s the responsibility of the landlord to disclose this information to the tenant, so they are aware of the lease’s full nature. The precise list of required disclosures varies between states, but every commercial lease in California needs to contain the following:
· Asbestos Disclosure: For properties built before 1979, the landlord must disclose whether or not there is asbestos in the property. If present, they must also disclose the location and necessary precautions to avoid exposure.
· Material Facts Disclosure: The landlord must disclose whether or not there are any hazardous materials on the premises. Not doing so is considered a fraudulent act as per California state law.
· Disability Access Inspection Disclosure: The landlord must disclose whether the premises have undergone an official inspection by a certified access specialist in regard to disabled access. Where it hasn’t, the disclosure must state that the tenant can request one at any time.
· Proposition 86 Warning Notice: This disclosure is only necessary for commercial property leased to tenants with 10+ employees. It is to inform the tenant of any harmful substances in the environment, usually about drinking water.
You can use our free commercial lease agreement template California if you are letting a commercial space to a tenant. As a legally binding document, a California commercial lease must follow the regulations set by the state to be valid. Our printable template does just that, ensuring all required disclosures within the state of California are in detail. This includes everything such as an asbestos disclosure, disability access inspection disclosure, and arbitration of disputes.
With our document, you can rest assured that it fully covers the rights of both parties and that the subject premises comply with the disclosures set by the state. Download the free office lease agreement template (available in Word or PDF) today to get started.
Using our free office lease agreement template, writing a California commercial lease agreement is simple. To start with, ensure you have the right commercial lease forms on hand. You then simply fill out the forms by following these steps:
Frequently Asked Questions
Yes, notaries must emboss all commercial lease forms in California with their stamp. Failure to do so means the document is not legally binding. Therefore, always do this before the commercial tenant moves into the property. In cases when you make changes to the agreement, a notary must also stamp these additions and modifications to make the changes official.
This depends on the precise terms detailed in the California lease agreement. But in all cases, the commercial landlord has to accept the offer for termination for it to be in effect. However, the landlord has the legal right to decline the offer. In these cases, the tenant will usually be liable to pay any outstanding rental payments for the remaining term of the contract because tenants are choosing to surrender their lease. Therefore, it is usually best to find a new commercial tenant to take over the lease if you plan to terminate the agreement early. Another option is to discuss subletting a portion of the property to another business. This money can partially cover the rental costs. This will encourage the commercial landlord to accept the termination.
Yes, the landlord can choose to end a commercial lease agreement early in the state of California if there is a forfeiture clause in the lease. However, this is generally only an option if the tenant breaches a clause in the contract. Examples could include failing to pay rent on time, committing an illegal act on the premises, or violating any other terms of the agreement. The landlord must give notice of termination to the tenant in writing.
