Office Space Rental Agreement: Everything You Need to Know
An office space rental agreement includes the agreed upon terms and conditions of an office lease.3 min read
An office space rental agreement includes the agreed upon terms and conditions of an office lease. It's a legal document that serves as proof if a dispute arises, and the case goes to court. Office space rental contracts are commercial agreements used when leasing or renting a property for business purposes to another person or business.
Under an office space rental agreement, the tenant, also called a renter or lessor, obtains the right to access and use the office space for business purposes in exchange for paying the landlord the agreed amount as long as the lease's term is in force.
Commercial Lease Agreements
Some other names for commercial lease agreements include:
- Business leases
- Commercial property leases
- Commercial real estate leases
- Industrial leases
- Office space leases
Commercial leases usually include information about the landlord and the tenant. This can include a guarantor, the amount of rent, the length of the lease term, as well as any other important information the landlord and tenant agree to include in the lease.
When Do You Need a Commercial Lease Agreement?
There are several situations that warrant the use of a commercial lease agreement. They include:
- If you own property — like an office, a retail space, or a space that's suitable for a restaurant — that you want to rent out to another business or person.
- If you're the owner of a warehouse, industrial facility, or another type of commercial space that you want to lease to another business or person.
- If you own any form of non-residential property that's suitable for commercial use and want to rent it to a business.
- If you're a tenant who's preparing to lease a commercial space to run your business.
Office Sublease Agreements
The contract for subletting an office usually includes the landlord's and tenant's details. The information needed includes each party's name, the annualized rent, monthly rent, and the lease's termination date. Some issues normally covered by a rental agreement include:
- Lease tenure
- Future taxes
- Lease amount
- Purpose the space will be used to fulfill
Many conditions are attached to the transaction when you are subletting an office space. If you choose to sublease, remember that the original lease terms and conditions must still be followed. If you are the person subleasing an office space to someone else, be sure to check on the sublessor's financial condition because if he doesn't pay the rent, you still have to cover it.
Office Lease Renewal
Renewing an office lease is more complicated than renewing a domestic lease. The process needs to be started a few months before the term expires. It falls to the tenant to contact the landlord and negotiate the new lease price under lease agreement requirements. The new lease can be finalized after the requirements have been clearly expressed and the landlord makes a counter-offer or quote, or when both parties have reached a consensus about the lease renewal terms.
Gross Lease or Net Lease
Under the terms of a gross lease, the tenant's responsibilities end when the rent payment is made. All remaining responsibility regarding property care and other payments falls to the landlord. With a net lease, the tenant accepts responsibility for not only rent payments but also for the property insurance, property tax, and the maintenance of the property.
Leases With Fixed End Dates
Fixed-end-date leases note the exact date tenancies end. Both the tenant and the landlord benefit from a fixed-end-date lease because the full length of the lease is established before it begins. During the lease's term, the rent can't be increased and no changes can be made to the rental agreement unless there is a clause stating that changes can be made, and the tenant agrees to that clause up front.
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