New Hampshire Commercial Lease Agreement
A New Hampshire commercial lease agreement is an important document for tenants seeking a fixed, long-term lease in a retail, industrial, or office space.3 min read
2. Understand the Exit Strategy
3. Common Issues With Commercial Leases
4. Understanding New Hampshire's Rental Agreement Laws
What's Involved in a New Hampshire Commercial Lease Agreement?
Before a landlord binds themselves to a tenant, they typically run a credit check on the business or individual to verify that the company is valid through the New Hampshire Secretary of State. Most monthly lease agreements are based on a price per square foot. For instance, if you rent a 1,000-square-foot retail space at $10 per square foot, the rent amounts to $10,000 per year. That means the monthly rent would cost $833.33.
Landlords consider other variables when entering into a commercial lease agreement. These variables include:
- Property expenses
- Who will pay utilities
- Common area maintenance
Landlords look for opportunities to increase rent over time, so it's important to understand how rent increases will be implemented before signing an agreement. You may agree to a fixed dollar amount or a fixed percentage according to a set schedule. You'll also need to account for expenses such as common area charges, insurance, and taxes, which are costs normally passed on to the tenants. A better option might be to agree on fair market rent. Either way, it's important to be upfront about rent increases so both parties can engage in long-term financial planning.
Understand the Exit Strategy
Most new tenants aren't thinking about leaving a new commercial space, but it's essential to give some consideration about where the business is headed and how its growth might affect its space needs before signing the lease.
The landlord will also need to consider what will happen to a commercial space once the tenant leaves. Landlords often must invest in improvements before attracting new tenants, which can affect the landlord's bottom line.
Common Issues With Commercial Leases
Signing a commercial lease is an important step in almost every business owner's life. Whether you're leasing an office, retail, or industrial space, it's important to note the specific needs of each industry and consider how a space is measured. Be sure you understand every lease term in the agreement and how those terms affect the lease.
For example, “usable space” is different from “rentable space” because these areas are measured differently. You may also see charges for “additional rent” that include utilities, real estate taxes, and fees for common area maintenance. It's important to go over these terms carefully so you understand what you're paying for.
If you're a landlord, it's understandable that you want to pass along fair expenses to the tenant, but tenants shouldn't have to pay for equipment or service people working at various locations. Charges built into the lease agreement should only include those that involve the site's operations. Tenants typically pay operating expenses while landlords pay capital expenses, which would include improvements to the building.
Make sure the lease agreement details what happens if either the tenant or landlord default. Will a notice be served? Is there a grace period? Can the landlord accelerate rent payment or terminate the lease and take possession? If the landlord doesn't meet obligations, can the tenant withhold rent until those obligations are met?
Understanding New Hampshire's Rental Agreement Laws
Rental and lease agreements are considered legally binding contracts governed by New Hampshire law. The agreements define the relationship between tenants and landlords. State laws are in place to protect both party's interest by outlining their rights and responsibilities in a way that makes things fair for all involved.
The commercial lease agreement should address terms like whether pets are allowed on the premises, whether security deposits are applicable, and when rent is due. New Hampshire places limits on the amount of money a landlord can require for a deposit and how soon the deposit is returned after the lease termination. State law also prohibits discrimination against tenants.
Lawful reasons a landlord may terminate a lease agreement include:
- Refusal to pay rent
- Failure to comply with lease terms
- Behavior that affects the safety of other building tenants
- Substantial damages to the premises
- Lead exposure hazards
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