Commercial Lease Application: Everything You Need to Know
A commercial lease application is a form those looking to rent a commercial space will be responsible for filling out before they can be considered for the property.3 min read
A commercial lease application is a form those looking to rent a commercial space will be responsible for filling out before they can be considered for the property. Since renting a commercial space is a large responsibility, the foundation for which many businesses rely upon, understanding the ins and outs of a lease application is essential. One of the first things to consider is how commercial leases differ from residential leases and what the terms in a commercial agreement mean. The primary portions of a commercial lease will include:
- The amount of rent
- The length of the lease
- The configuration of the physical space
It is always important to fully review your lease agreement and understand everything that is included in it before signing anything. Lease agreements can include common traps that are often the source of problems for a renter in the future. Some agreements are also poorly worded or are created from a template so they include generic information with little information on issues that could arise. The main things that you will want to consider before agreeing to a lease are:
- The cost of rent. Obviously one of the most important things to consider before signing a lease agreement is making sure the rent is affordable.
- The length of the lease. A short-term lease is often more favorable to businesses that are expecting to grow. Tying yourself into a 10-year lease can be problematic for companies working on expanding their business. If possible, choose a short-term lease with options to renew.
- Whether or not the space requires modification. When assessing the space in regards to what your business will need, determine if there will be any alterations necessary to accomplish your goals, and discuss with the landlord if the alterations are allowed under the terms of the lease agreement. This can include requests such as dock modifications, installing signage, and putting up cubicles.
- Whether competitors can rent close to the location. If you are leasing a section in a large building, you may want to check to see if the other sections could be leased to competition, creating a concern if you are selling to walk-up traffic.
What Goes Into Processing a Commercial Lease Application?
When you fill out a commercial lease application, a few steps will be required to complete the process of the application and receive a determination from the landlord.
- The landlord will verify business details and references to help determine the lessee's creditworthiness.
- A landlord can charge the applicant a fee to conduct a credit check, which will normally range from $50 to $200.
- The application will need to include a background of the business, gross income and expenses, bank balances, any rental history, and the owners of the company who may be required to sign a personal guarantee.
Filling out a commercial lease application will be the first step in the rental process for a commercial building. While the form you will be required to fill out is most often known as a commercial lease application, it can also be referred to as a:
- Commercial Rental Application
- Commercial Tenant Information Form
- Commercial Property Application
- Business Lease Application
- Retail Lease Application
Who Needs a Commercial Lease Application?
Any person or business that is looking to acquire some space to perform business will often be required to fill out a commercial lease application in order to be considered to be a renter for the property. No matter how long you have been in business, almost all prospective tenants will be required to go through a screening process by the owner or property manager of the building. In the lease application you will most often have to complete:
- An application
- A formal offer to lease letter
- An interview process with the landlord
What Information Can a Landlord Request on a Commercial Lease Application?
A landlord will be required to stay objective when determining the worthiness of occupants and must make sure their screening process does not discriminate against applicants. To avoid the risk of being accused of discrimination, many landlords will use the same form for each applicant. Information typically requested on a commercial lease agreement includes:
- The business name
- The company structure
- The intended use of the space
- Previous rental information, including the previous landlord
- Business owner information
- Business banking information
- Credit references
- Authorization to perform a credit check
If you need help with a commercial lease application, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.