California commercial lease agreement template

California Commercial Lease Agreement

This Commercial Lease Agreement (the “Lease”) is made and entered into as of [Date], by and between [Landlord Name], a [Landlord Entity Type] located at [Landlord Address] (“Landlord”), and [Tenant Name], a [Tenant Entity Type] located at [Tenant Address] (“Tenant”). Landlord is represented by [Landlord Representative Name], who has the authority to act on behalf of Landlord. Tenant is represented by [Tenant Representative Name], who has the authority to act on behalf of Tenant.

Premises

The Landlord leases to the Tenant, and the Tenant leases from the Landlord, the following described premises (the “Premises”):

• Property Address: [Property Address]
• Legal Description: [Legal Description]
• Suite/Unit Number: [Suite/Unit Number]
• Rentable Area: [Rentable Area] square feet.
• Included (Check all that apply):
  • [ ] Common Areas
  • [ ] Storage Area: [Storage Area Description]
  • [ ] Parking Spaces: [Number of Parking Spaces]
  • [ ] Signage Rights: [Signage Description]

Permitted Use

The Premises shall be used and occupied solely for the purpose of: [Tenant's Intended Business Type].

Restricted/Prohibited Uses: [List Restricted/Prohibited Uses]

• Option A: Standard Restriction: "Tenant shall not use the premises for any unlawful purpose."
• Option B: Industry-Specific Restriction: "Tenant shall not use the premises for the sale of [Specific Prohibited Item]."
• Option C: General Restriction: "Tenant shall not use the premises in a manner that creates a nuisance to other tenants."

Lease Term

• Option A: Fixed Term
  • The term of this Lease shall commence on [Commencement Date] and shall expire on [Expiration Date].
• Option B: Month-to-Month Tenancy
  • The term of this Lease shall commence on [Commencement Date] and shall continue on a month-to-month basis, terminable by either party with [Number] days written notice.
• Renewal/Extension Options: [Renewal/Extension Options Description]
• Early Possession: Tenant is permitted early possession beginning on [Early Possession Date].
• Holdover: Any holdover will result in rent at [Percentage]% of the then-current rent.
• [ ] Automatic Renewal Clause: This Lease shall automatically renew for successive [Number] year terms unless either party provides written notice of termination at least [Number] days prior to the end of the then-current term.
• [ ] Right of First Refusal: Tenant shall have the right of first refusal to lease adjacent space that becomes available.
• [ ] Expansion Clause: Tenant shall have the option to expand into [Designated Area] under the terms outlined in Exhibit [Exhibit Number].

Rent

• Base Rent: The base rent shall be [Base Rent Amount] per [Month/Year], payable in advance on the [Day] day of each [Month/Year].
  • Option A: Fixed Rent: The Base Rent shall remain constant throughout the term.
  • Option B: Graduated Rent: The Base Rent shall increase as follows:
    • Year 1: [Rent Amount]
    • Year 2: [Rent Amount]
    • Year 3: [Rent Amount]
  • Option C: Percentage Rent: In addition to the Base Rent, Tenant shall pay [Percentage]% of gross sales exceeding [Sales Threshold].
• Rent Escalation:
  • Option A: Step-Up: The base rent will increase by [Dollar Amount] on [Date].
  • Option B: CPI Adjustment: The base rent will be adjusted annually based on the Consumer Price Index (CPI).
• Due Date: Rent is due on the [Day] of each month.
• Payment Method: Rent shall be paid by [Payment Method] to [Payment Address].
• Late Fee: A late fee of [Late Fee Amount] shall be charged for any rent not received within [Number] days of the due date.
• Returned Check Fee: A fee of [Returned Check Fee Amount] shall be charged for any returned check.
• Additional Rent: [Description of Additional Rent]
• Common Area Maintenance (CAM) Charges: Tenant shall pay its pro rata share of CAM charges, estimated to be [CAM Estimate] per [Month/Year], subject to annual reconciliation.

Operating Expenses

• Option A: Triple Net (NNN): Tenant shall be responsible for all operating expenses, including real estate taxes, insurance, and common area maintenance.
• Option B: Gross: Landlord shall be responsible for all operating expenses.
• Option C: Modified Gross: Landlord shall pay for [Landlord Paid Expenses] and Tenant shall pay for [Tenant Paid Expenses].
• Real Estate Taxes: Responsibility for payment: [Party Responsible].
• Insurance: Responsibility for payment: [Party Responsible].
• Utilities: Responsibility for payment: [Party Responsible].
• Janitorial: Responsibility for payment: [Party Responsible].
• Repairs: Responsibility for payment: [Party Responsible].
• Landscaping: Responsibility for payment: [Party Responsible].
• HVAC Maintenance: Responsibility for payment: [Party Responsible].
• Capital Improvements: Responsibility for payment: [Party Responsible].
• Pass-Through/Reimbursement Mechanism: [Description of Pass-Through/Reimbursement Mechanism].
• [ ] Audit Rights: Tenant shall have the right to audit Landlord's operating expense records.
• [ ] Expense Caps: Operating expense increases are capped at [Percentage]% per year.

Security Deposit

• Amount: The security deposit shall be [Security Deposit Amount].
• Purpose: The security deposit shall be held as security for the Tenant’s performance of its obligations under this Lease.
• Holding Procedures: The security deposit will be held by Landlord in a [Description of Holding Procedures]
• Permitted Uses: Landlord may use the security deposit to cover damages, unpaid rent, or other breaches of this Lease by Tenant.
• Interest: [Interest Bearing/Non-Interest Bearing]
• Conditions for Withholding: [Description of Conditions for Withholding]
• Procedures for Return: Landlord shall return the security deposit, less any deductions, within [Number] days after the termination of this Lease.
• [ ] Letter of Credit: Tenant may provide a letter of credit in lieu of a cash security deposit.
• [ ] Guaranty: Tenant may provide a guaranty from [Guarantor Name] in lieu of a cash security deposit.

Maintenance and Repair

• Landlord's Obligations:
  • Structural Repairs: Landlord shall be responsible for all structural repairs to the Premises.
  • Systems (HVAC, Plumbing, Electrical): Landlord shall be responsible for maintaining the HVAC, plumbing, and electrical systems.
• Tenant's Obligations:
  • Non-Structural Repairs: Tenant shall be responsible for all non-structural repairs to the Premises.
  • Cosmetic Repairs: Tenant shall be responsible for all cosmetic repairs to the Premises.
• Option A: Self-Maintenance: Tenant shall maintain the premises at its own expense.
• Option B: Landlord-Maintained: Landlord shall maintain the premises at Tenant's expense (as additional rent).

Construction, Improvements, and Alterations

• Tenant Build-Out Allowance: Landlord shall provide Tenant with a build-out allowance of [Dollar Amount].
• Landlord Approval Requirements: Tenant shall obtain Landlord’s approval for any alterations or improvements to the Premises.
• Procedures for Submitting Plans: Tenant shall submit plans for any alterations or improvements to Landlord for approval.
• Permit Acquisition: [Party Responsible] shall be responsible for acquiring all necessary permits for any alterations or improvements.
• Restoration Obligations: Tenant shall restore the Premises to its original condition upon termination of this Lease, unless otherwise agreed.
• Ownership of Alterations/Fixtures: [Party Responsible] shall own all alterations and fixtures upon termination of this Lease.
• Option A: Turnkey Improvements: Landlord will provide the premises with the improvements specified in Exhibit [Exhibit Number].
• Option B: As-Is: Tenant accepts the premises in "as-is" condition.

Insurance

• Liability Insurance: Tenant shall maintain liability insurance in the amount of [Liability Insurance Amount].
• Property Insurance: Tenant shall maintain property insurance covering the Premises and Tenant’s personal property.
• Casualty Insurance: Tenant shall maintain casualty insurance covering fire, flood, and other casualties.
• Worker's Compensation Insurance: Tenant shall maintain worker's compensation insurance as required by law.
• Required Endorsements: Tenant’s insurance policies shall include Landlord as an additional insured.
• Waiver of Subrogation: Tenant waives any right of subrogation against Landlord.
• Proof of Insurance: Tenant shall provide Landlord with proof of insurance upon execution of this Lease and annually thereafter.
• Procedures for Policy Updates: Tenant shall notify Landlord of any changes to its insurance policies.
• [ ] Business Interruption Insurance: Tenant shall maintain business interruption insurance.

Indemnification

Tenant shall indemnify and hold Landlord harmless from any and all claims, damages, and liabilities arising from Tenant’s use of the Premises, including bodily injury, property damage, and third-party claims.

Survival Period: This indemnification shall survive the termination of this Lease.

Limitations: [Description of Indemnification Limitations].

Compliance with Laws

Tenant shall comply with all applicable local, state, and federal laws, zoning ordinances, ADA/accessibility requirements, environmental regulations, and health & safety codes.

• [ ] Proposition 65 Notice: Tenant is responsible for providing Proposition 65 notices as required by law.
• [ ] Cal/OSHA Standards: Tenant shall comply with all applicable Cal/OSHA standards.
• [ ] Earthquake Codes: Tenant shall comply with all applicable earthquake codes.

Assignment and Subletting

Tenant shall not assign this Lease or sublet the Premises without Landlord’s prior written consent.

Landlord’s Rights to Approve/Deny: Landlord may withhold consent to an assignment or subletting for any reasonable reason.

Conditions for Approval: [Description of Conditions for Approval]

Profit Sharing: Landlord shall be entitled to [Percentage]% of any profit Tenant derives from an assignment or subletting.

Recapture Rights: Landlord shall have the right to terminate this Lease and recapture the Premises upon Tenant’s request to assign or sublet.

Required Notices: Tenant shall provide Landlord with written notice of any proposed assignment or subletting.

• Option A: Absolute Restriction: Tenant may not assign or sublet the premises at any time.
• Option B: Conditional Restriction: Tenant may assign or sublet the premises with landlord's consent, not to be unreasonably withheld.
• Option C: Assignment to Affiliate: Tenant may assign this lease to an affiliate company without landlord consent.

Tenant Default and Landlord Remedies

• Events of Default: [Description of Events of Default]
• Cure Periods: Tenant shall have [Number] days to cure any default.
• Rights to Terminate Lease: Landlord shall have the right to terminate this Lease upon Tenant’s default.
• Lockout: Landlord shall have the right to lock out Tenant upon Tenant’s default.
• Rent Acceleration: Landlord shall have the right to accelerate the rent upon Tenant’s default.
• Damages: Landlord shall be entitled to recover damages from Tenant for any breach of this Lease.
• Recovery of Attorney's Fees: Landlord shall be entitled to recover attorney’s fees incurred in enforcing this Lease.
• Liens: Landlord shall have a lien on Tenant’s personal property located on the Premises.
• Option A: Strict Cure Periods: Strict adherence to cure periods.
• Option B: Generous Cure Periods: Extended cure periods.

Landlord Default and Tenant Remedies

• Required Notice: Tenant shall provide Landlord with written notice of any default.
• Cure Periods: Landlord shall have [Number] days to cure any default.
• Abatement: Tenant shall be entitled to rent abatement during any period of Landlord’s default.
• Termination: Tenant shall have the right to terminate this Lease upon Landlord’s default.
• Self-Help: Tenant shall have the right to cure Landlord’s default and deduct the costs from rent.
• Option A: Self-Help Rights: Tenant has self-help rights as outlined.
• Option B: No Self-Help Rights: Tenant has no self-help rights.

Casualty and Condemnation

• Obligations and Rights: [Description of Obligations and Rights in Case of Casualty or Condemnation]
• Restoration: [Description of Restoration Obligations]
• Rent Abatement: Rent shall abate during any period of casualty or condemnation.
• Termination Options: Either party shall have the right to terminate this Lease upon a material casualty or condemnation.
• Insurance Proceeds Allocation: [Description of Insurance Proceeds Allocation]
• Control of Rebuilding: [Party Responsible] controls the rebuilding of the premises
• Termination Circumstances: [Circumstances under which the lease may be terminated]

Surrender, Yield-Up, and Holding Over

• Condition Required Upon Lease Termination: Tenant shall surrender the Premises in good condition, reasonable wear and tear excepted.
• Responsibilities for Removing/Abandoning Property: Tenant shall be responsible for removing all of its personal property from the Premises upon termination of this Lease.
• Holdover Rent: Any holdover shall result in rent at [Percentage]% of the then-current rent.
• Consequences: [Description of Consequences of Holding Over]
• Option A: Strict Holdover Penalties: Stricter penalties for holding over.
• Option B: Lenient Holdover Penalties: More lenient penalties for holding over.

Notices

All notices shall be in writing and delivered to the following addresses:

• Landlord: [Landlord Notice Address]
• Tenant: [Tenant Notice Address]

Methods of Delivery: Notices may be delivered by certified mail, email, or courier.

Deemed Receipt Rules: Notices shall be deemed received [Number] days after mailing or upon confirmation of receipt.

• [ ] Notice Required: Notice is required for [Actions requiring Notice].
• [ ] Notice Waived: Notice is waived for [Actions where Notice is Waived].

Option Rights

• [ ] Right of First Refusal: [Description of Right of First Refusal]
• [ ] Right of First Offer: [Description of Right of First Offer]
• [ ] Expansion Option: [Description of Expansion Option]
• [ ] Contraction Option: [Description of Contraction Option]
• [ ] Purchase Option: [Description of Purchase Option]

Environmental Compliance

Tenant shall comply with all applicable environmental laws and regulations.

California-Specific Disclosures (if applicable):

• [ ] Asbestos Notification (if pre-1979 building): [Asbestos Notification Information]
• [ ] Lead Disclosure: [Lead Disclosure Information]
• [ ] Mold Disclosure: [Mold Disclosure Information]
• [ ] Vapor Intrusion: [Vapor Intrusion Information]

Required Government Filings: [Description of Required Government Filings]

Americans with Disabilities Act (ADA) and California Unruh Civil Rights Act

• Responsibility for Accessibility Upgrades: [Party Responsible] shall be responsible for making any necessary accessibility upgrades to the Premises.
• Ongoing Compliance: [Party Responsible] shall be responsible for ongoing compliance with the ADA and Unruh Civil Rights Act.
• Option A: Allocate Responsibility: Landlord or tenant is allocated full responsibility.
• Option B: Indemnify: Landlord or tenant indemnifies the other for non-compliance.

California-Specific Mandated Disclosures

• [ ] Proposition 65 Notice: [Proposition 65 Warning]
• [ ] Asbestos Notification (if pre-1979 building): [Asbestos Notification Information]
• [ ] Energy Disclosure: [Energy Disclosure Information]
• [ ] Megan’s Law Database Information: [Megan’s Law Database Information]
• [ ] Flood Hazard Notice: [Flood Hazard Notice]
• [ ] Earthquake Fault Zone Notice: [Earthquake Fault Zone Notice]

Anti-Discrimination, Equal Opportunity, and Fair Housing

Landlord and Tenant shall comply with all applicable anti-discrimination, equal opportunity, and fair housing laws.

Anti-Harassment, Retaliation Prevention, and Wage Theft

Landlord and Tenant shall comply with all applicable anti-harassment, retaliation prevention, and wage theft laws.

Security, Access, Signage, and Parking

• Security Procedures: [Description of Security Procedures]
• Access: Tenant shall have access to the Premises [Hours of Access].
• Signage Rights: [Description of Signage Rights]
• Parking Allocation: Tenant shall be allocated [Number] parking spaces, including [Number] ADA-compliant spaces.
• [ ] Security Deposit: See section above.
• [ ] Parking Charges: Parking charges are [Parking Charge Amount] per month.

Force Majeure

Neither party shall be liable for any failure to perform its obligations under this Lease due to any cause beyond its reasonable control, including fire, flood, pandemics, or strikes.

• Procedures for Notice: [Description of Procedures for Notice]
• Option A: Lease Abatement: Rent shall abate during the force majeure event.
• Option B: Lease Termination: Either party may terminate the lease if force majeure exceeds [Number] days.

Dispute Resolution

• Option A: Mediation: Any dispute arising out of this Lease shall be submitted to mediation.
• Option B: Binding Arbitration: Any dispute arising out of this Lease shall be submitted to binding arbitration.
• [ ] Waiver of Jury Trial: Landlord and Tenant waive their right to a jury trial.
• Venue: Venue for any legal action shall be in [County] County, California.
• Governing Law: This Lease shall be governed by the laws of the State of California.
• [ ] Attorney's Fees: The prevailing party in any legal action shall be entitled to recover attorney’s fees.
• [ ] Small Claims Exception: Claims under [Dollar Amount] can be filed in small claims court.

Entire Agreement, Waiver, Amendment, and Severability

This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings.

Waiver: No waiver of any provision of this Lease shall be effective unless in writing.

Amendment: This Lease may be amended only by a written instrument signed by both parties.

Severability: If any provision of this Lease is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Requirements for Written Amendments: All amendments must be in writing and signed by both parties.

• [ ] Integration of Addenda/Exhibits: The following exhibits are incorporated into this lease: [List Exhibits]

Signatures

IN WITNESS WHEREOF, the parties have executed this Lease as of the date first written above.

[Landlord Name]

By: [Landlord Representative Name]

Title: [Landlord Representative Title]

Date: [Date]

[Tenant Name]

By: [Tenant Representative Name]

Title: [Tenant Representative Title]

Date: [Date]

Notary Acknowledgment (Optional)

State of California

County of [County Name]

On this [Day] day of [Month], [Year], before me, [Notary Public Name], personally appeared [Landlord Representative Name], proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

[Notary Public Signature]

[Notary Public Seal]

Exhibits

• [ ] Exhibit A: Floor Plan/Site Plan
• [ ] Exhibit B: Rules and Regulations
• [ ] Exhibit C: Work Letter (Improvements)
• [ ] Exhibit D: Landlord’s Disclosures
• [ ] Exhibit E: Tenant Improvement Allowance Schedule
• [ ] Exhibit F: California State Mandated Forms