California Commercial Lease Agreement

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The California commercial lease agreement allows for a landlord to legally bind a business entity or individual (Hereinafter referred to as the “Tenant”) into occupying retail, industrial or office space for monthly payments.

The landlord will usually have to make repairs to the property to the tenant’s specifications. Due to the initial investment made on behalf of the landlord it is recommended that a credit application be filled-in marking the tenant’s banking information and credit history. It is also a good idea for the landlord to check the business’s status at the Secretary of State’s office to ensure the Principal is the same listed with the State.

 Lease Types

Once the tenant is approved the agreement can be modified in one of three ways;

Triple Net (NNN)

More common for retail tenants, is structured so that the landlord receives a fixed amount every month along with all expenses paid that are in relation to the property including; real estate taxes, insurance, and any maintenance on the property (CAM’s). The landlord is only obligated for structural defects and issues with the roof.

Modified Gross

Type of lease that shares the cost of the expenses related to the real estate between the landlord and tenant.

Gross

The tenant is obligated to pay a single payment every month (does not usually include water, electricity, and sewer) to the landlord. This is more common with office leases.

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