A commercial lease application Texas is used by a landlord in order to screen a potential tenant before entering into a formal lease agreement. A commercial lease application is similar to a rental application for residential properties. It is the first step in leasing commercial property and potentially starting a landlord-tenant relationship. The application is used to objectively evaluate commercial applicants to determine whether they would be a good fit for the commercial space.

Commercial lease applications may be known by several other names, such as:

  • Commercial property application.
  • Commercial rental application.
  • Commercial tenant information form.
  • Retail lease application.
  • Business lease application.

It's quite likely that any person who needs space in order to run their business will need to fill out a commercial lease application to begin the process of leasing commercial real estate. After all, it's not very common that a business owner who is looking to lease commercial property will not need to go through some sort of preliminary screening with the owner or property manager.

A landlord or property manager who handles any type of property, whether it's residential, commercial, or mixed-use, must remain objective when it comes to screening potential clients in order to avoid the possibility of a discrimination claim. The best and easiest way to accomplish this is by using the same application process (with the same questions) for every potential tenant that is interested in leasing the space. The landlord's application or questionnaire will be the same one used for any interested parties for a particular space, but the application or questionnaire may look different when it pertains to a different space.

What Is Included in a Commercial Lease Application?

A commercial lease application typically includes the following essential components:

  • Business information: Name, intended use of property, business structure (sole proprietorship, partnership, corporation, LLC).
  • Current and previous rental property and landlord information: Address, monthly payment, landlords' names, addresses, phone numbers, and email addresses.
  • Business owner information: Names, addresses, phone numbers, and email addresses.
  • Bank and/or credit union information: The potential tenant's institutions and contact information.
  • Credit references: Names and contact information of companies from whom a potential tenant makes transactions with a credit account.
  • Credit check agreement: Permission to conduct a credit check.

How Does a Landlord Determine Qualification?

In most cases, a landlord will seek to enter a lease agreement with the first qualified tenant who is able to meet the application's criteria and whose company suits the commercial space. As an example, a women's boutique with a great credit history that is interested in leasing space in a shopping mall is more likely to be considered suitable than an auto mechanic hoping to open a collision repair shop in the same property.

Commercial property management companies and landlords typically require more extensive criteria on their applications, as opposed to residential tenants.

The entire application process may include the initial application, background and credit checks, contacting references and former landlords, reviewing business reports, a formal letter ("Offer to Lease"), several interviews between the landlord and tenant, and finally, the lease contract. Landlords may even want to examine the company's business plans or financial statements.

What Is Included in the Commercial Lease?

Commercial leases vary significantly in their contents, but each contract must contain five essential elements: offer, consideration, acceptance, mutual assent, and execution and delivery. In the state of Texas, the Texas Property Code will apply specific default requirements and responsibilities on landlords and tenants if the lease does not include its own provisions.

In addition to the essential elements, there are a few common provisions that are likely to be present in any lease:

  • The tenant may or may not be allowed to sublease or sublet.
  • The tenant may have limited rights to make any type of alterations to the commercial property.
  • The landlord is responsible for paying all real estate taxes, common area maintenance charges, and insurance fees.
  • The tenant is responsible for paying all utility bills related to their use of the space.
  • Neither tenant will use a real estate agent to make agreements.

Once the formal lease agreement has been signed, it becomes legally binding immediately. Signing the document in front of an authorized notary may help protect each party. If the tenant is a new company, the landlord might request a personal guaranty from them.

If you need help understanding a commercial lease application in Texas, 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, Stripe, and Twilio.