Illinois commercial lease agreement template

Illinois Commercial Lease Agreement

This Commercial Lease Agreement (the “Lease”) is made and entered into this [Date], by and between [Landlord Name], whose address is [Landlord Address] (hereinafter referred to as "Landlord"), and [Tenant Name], whose address is [Tenant Address] (hereinafter referred to as "Tenant").

Parties and Representatives

• Option A: Landlord’s Authorized Representative: [Representative Name], Title: [Title]
• Option B: Tenant’s Authorized Representative: [Representative Name], Title: [Title]

Premises

• Option A: Address: [Street Address], Unit/Suite: [Unit Number], City: [City], State: Illinois, Zip Code: [Zip Code]. Legal Description: [Legal Description]
• Option B: Square Footage: [Square Footage] square feet (approximate).
• Option C: Common Areas Included: [List of Common Areas]

Permitted Use

• Option A: Permitted Use: The Premises shall be used solely for the purpose of [Description of Permitted Use].
• Option B: Restrictions: The Premises shall not be used for [List of Prohibited Uses].
• Option C: Exclusive Use: Landlord shall not lease any other space in the building for [Description of Exclusive Use].

Lease Term

• Option A: Commencement Date: [Date]. Expiration Date: [Date].
• Option B: Renewal Option: Tenant shall have the option to renew this Lease for [Number] additional term(s) of [Length of Term] each, provided Tenant gives Landlord written notice of its intent to renew at least [Number] days prior to the expiration of the then-current term.
• Option C: Month-to-Month Tenancy: This lease shall be a month-to-month tenancy commencing on [Date].

Rent

• Option A: Base Rent: Tenant shall pay Landlord a base rent of [Dollar Amount] per month, payable in advance on the [Day] day of each month.
• Option B: Escalation Clause: The base rent shall increase by [Percentage]% annually, commencing on [Date].
• Option C: CPI Adjustment: The base rent shall be adjusted annually based on the Consumer Price Index (CPI) for [City/Region].
• Option D: Late Payment Penalty: A late fee of [Dollar Amount] shall be charged for any rent payment received more than [Number] days after the due date.

Additional Rent

• Option A: CAM Charges: Tenant shall pay its proportionate share of Common Area Maintenance (CAM) charges, estimated to be [Dollar Amount] per month.
• Option B: Real Estate Taxes: Tenant shall pay [Percentage]% of the real estate taxes assessed against the property.
• Option C: Insurance Contribution: Tenant shall pay [Percentage]% of the landlord's building insurance costs.
• Option D: Utilities: Tenant shall be responsible for all utility costs associated with the Premises, including [List of Utilities].
• Option E: Gross Lease: All operating expenses, real estate taxes, and insurance are included in the base rent.

Security Deposit

• Option A: Amount: Tenant shall deposit with Landlord a security deposit of [Dollar Amount].
• Option B: Handling: The security deposit shall be held in an escrow account at [Bank Name] in accordance with Illinois law. (If applicable in certain localities, interest should be paid.)
• Option C: Permissible Deductions: Landlord may deduct from the security deposit for damages to the Premises (excluding normal wear and tear), unpaid rent, and costs of cleaning, repair, or restoration.
• Option D: Refund: The security deposit, less any permissible deductions, shall be refunded to Tenant within [Number] days after the termination of the Lease and Tenant's surrender of the Premises.

Improvements and Build-Out

• Option A: Initial Alterations: Landlord shall be responsible for the following initial alterations: [Description of Landlord's Obligations].
• Option B: Tenant Improvements: Tenant shall be responsible for all other improvements to the Premises.
• Option C: Landlord Approval: All tenant improvements shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld.
• Option D: Restoration: Upon termination of the Lease, Tenant shall [Restore/Not Restore] the Premises to its original condition, except for reasonable wear and tear.
• Option E: Tenant Improvement Allowance: Landlord shall provide Tenant with a tenant improvement allowance of [Dollar Amount].

Maintenance and Repair

• Option A: Landlord's Obligations: Landlord shall maintain the common areas, roof, structural components, and HVAC system.
• Option B: Tenant's Obligations: Tenant shall maintain the interior of the Premises in good repair and condition.
• Option C: Maintenance Standards: All maintenance and repairs shall be performed in a workmanlike manner and in accordance with all applicable codes and regulations.
• Option D: Pest Control: Tenant is responsible for pest control.
• Option E: Landlord Access for Repairs: Landlord shall have the right to enter the premises to make repairs during reasonable hours with reasonable notice except in cases of emergency.

Insurance

• Option A: Commercial Liability Insurance: Tenant shall maintain commercial liability insurance with limits of not less than [Dollar Amount] per occurrence and [Dollar Amount] in the aggregate.
• Option B: Property Insurance: Tenant shall maintain property insurance covering its personal property and any improvements to the Premises.
• Option C: Business Interruption Insurance: Tenant shall maintain business interruption insurance.
• Option D: Named Parties: All insurance policies shall name Landlord as an additional insured.
• Option E: Waiver of Subrogation: The parties waive all rights of subrogation against each other.
• Option F: Proof of Insurance: Tenant will provide Landlord with certificates of insurance evidencing the required coverage.

Assignment and Subletting

• Option A: Landlord Consent Required: Tenant shall not assign this Lease or sublet the Premises without Landlord's prior written consent, which shall not be unreasonably withheld.
• Option B: Conditions for Approval: Landlord's consent shall not be unreasonably withheld if the proposed assignee or subtenant is financially sound and the proposed use is consistent with the Permitted Use.
• Option C: Procedure for Request: Tenant shall provide Landlord with [Number] days' written notice of any proposed assignment or subletting, along with information about the proposed assignee or subtenant.
• Option D: Transferability: This lease is transferable in the event of a business sale.

Default and Remedies

• Option A: Events of Default: Tenant shall be in default if it fails to pay rent when due, fails to comply with any other term of this Lease, or abandons the Premises.
• Option B: Late Fees and Interest: In addition to late fees, unpaid rent shall accrue interest at a rate of [Percentage]% per annum.
• Option C: Right to Cure: Tenant shall have [Number] days to cure any default, except for nonpayment of rent, for which Tenant shall have [Number] days to cure.
• Option D: Landlord's Remedies: Upon default, Landlord may terminate this Lease, re-enter the Premises, and recover damages, including unpaid rent, costs of reletting, and any other losses incurred by Landlord. The Illinois Forcible Entry and Detainer Act governs any eviction proceedings.
• Option E: Notice Requirements: Landlord shall provide Tenant with written notice of any default and the opportunity to cure.

Surrender of Premises

• Option A: Restoration: Upon termination of the Lease, Tenant shall surrender the Premises in the same condition as when received, except for reasonable wear and tear.
• Option B: Personal Property Removal: Tenant shall remove all of its personal property from the Premises upon termination of the Lease.
• Option C: Abandonment: If Tenant abandons the Premises, Landlord may re-enter and relet the Premises without terminating the Lease.
• Option D: Holdover: Any holding over after the expiration of the Lease shall be deemed a month-to-month tenancy at [Percentage]% of the then-current rent.

Signage

• Option A: Landlord Approval: All signage shall be subject to Landlord's prior written approval and must comply with all applicable municipal and building regulations.
• Option B: Signage Rights: Tenant shall have the right to install [Description of Signage] on the exterior of the building, subject to Landlord's approval.

Compliance with Laws

• Option A: Tenant's Responsibility: Tenant shall comply with all applicable laws, ordinances, and regulations, including building codes, zoning, health and safety, environmental, and accessibility requirements (including ADA).
• Option B: Landlord's Responsibility: Landlord warrants that the premises complies with all applicable laws, ordinances and regulations.
• Option C: Zoning Compliance: Tenant is responsible for verifying zoning compliance.

Indemnification and Liability

• Option A: Mutual Indemnification: Each party shall indemnify and hold harmless the other party from any and all claims, losses, damages, and liabilities arising out of its negligence or willful misconduct.
• Option B: Limitation of Liability: In no event shall Landlord be liable for any consequential, incidental, or punitive damages.
• Option C: Waiver of Subrogation: The parties waive all rights of subrogation against each other.

Inspection and Access

• Option A: Landlord's Right to Inspect: Landlord shall have the right to enter the Premises during reasonable hours with [Number] hours' notice for the purpose of inspection, repair, or showing the Premises to prospective tenants or purchasers.

Destruction, Damage, and Condemnation

• Option A: Damage: If the Premises are damaged by fire or other casualty, Landlord shall repair the Premises within a reasonable time, unless the damage is so substantial as to render the Premises untenantable, in which event either party may terminate the Lease.
• Option B: Condemnation: If the Premises are taken by eminent domain, this Lease shall terminate.

Quiet Enjoyment and Non-Disturbance

• Option A: Quiet Enjoyment: Landlord warrants that Tenant shall have quiet enjoyment of the Premises during the term of this Lease.
• Option B: SNDA: This Lease shall be subordinate to any existing or future mortgages on the property, provided that Landlord obtains a Subordination, Non-Disturbance, and Attornment Agreement (SNDA) from the mortgagee.

Hazardous Materials and Environmental Compliance

• Option A: Prohibited Substances: Tenant shall not use, store, or dispose of any hazardous materials on the Premises without Landlord's prior written consent.
• Option B: Tenant's Responsibilities: Tenant shall comply with all applicable environmental laws and regulations.
• Option C: Remediation: Tenant shall be responsible for remediating any environmental contamination caused by its use of the Premises.

Dispute Resolution

• Option A: Negotiation: The parties shall attempt to resolve any disputes through good faith negotiation.
• Option B: Mediation: If negotiation fails, the parties shall submit to mediation.
• Option C: Arbitration: Any unresolved dispute shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association.
• Option D: Governing Law and Jurisdiction: This Lease shall be governed by and construed in accordance with the laws of the State of Illinois. The venue for any legal action shall be [County Name] County, Illinois.

General Provisions

• Option A: Notices: All notices shall be in writing and delivered by certified mail, return receipt requested, to the addresses set forth above.
• Option B: Entire Agreement: This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings.
• Option C: Amendments: This Lease may be amended only by a written instrument signed by both parties.
• Option D: Waivers: No waiver of any provision of this Lease shall be effective unless in writing.
• Option E: Severability: If any provision of this Lease is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• Option F: Force Majeure: Neither party shall be liable for any delay or failure to perform its obligations under this Lease due to force majeure events.
• Option G: Counterparts: This Lease may be executed in counterparts, each of which shall be deemed an original.
• Option H: Electronic Signatures: Electronic signatures shall be considered valid and binding.

Illinois-Specific Provisions

• Option A: Governing Law: This Lease shall be governed by the laws of the State of Illinois.
• Option B: Radon Disclosure: [Radon Disclosure Language as Required by Illinois Law]
• Option C: Local Ordinances: Tenant shall comply with all applicable local ordinances, including those of the City of Chicago and Cook County.
• Option D: Security Deposit Handling: Landlord shall comply with all Illinois laws regarding the handling of security deposits, including, where required, payment of interest.
• Option E: Fire/Life Safety: Tenant shall comply with all applicable fire and life safety codes and regulations.
• Option F: Eviction Notice: Landlord will comply with the notice requirements outlined in the Illinois Forcible Entry and Detainer Act prior to commencing any eviction action.
• Option G: Confession of Judgment: [Confession of Judgment Clause - Use with Caution and Legal Consultation Required - Not Permitted in All Situations]
• Option H: Cannabis Use: [Clause Regarding Commercial Cannabis Use, if Applicable and in Compliance with Illinois Law]

Business License/Permits

• Option A: Tenant Responsibility: Tenant is solely responsible for obtaining and maintaining all required state and municipal business licenses, registrations, and permits necessary for its operation within the Premises and in compliance with Illinois law.

COVID-19/Public Health Emergency Clause (Optional)

• Option A: Delayed or modified operation, rent reduction, or termination rights may be negotiated if Illinois or local regulations require or permit during a public health emergency. Specific details may be appended as an addendum to this lease.

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

[Landlord Name]

By: [Landlord Signature]

Name: [Landlord Printed Name]

Title: [Landlord Title]

[Tenant Name]

By: [Tenant Signature]

Name: [Tenant Printed Name]

Title: [Tenant Title]