Michigan restaurant lease agreement template

Michigan Restaurant Lease Agreement

This Michigan Restaurant Lease Agreement (the “Agreement”) is made and entered into as of this [Date] by and between [Landlord Name], residing at [Landlord Address] (“Landlord”), and [Tenant Name], residing at [Tenant Address] (“Tenant”).

Premises:

Option A: Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises located at [Property Address], [City], Michigan, with parcel identification number [Parcel ID] (the “Premises”).

Option B: The Premises consist of approximately [Square Footage] square feet, including the following: [Description of Premises: e.g., seating area, kitchen, bar, storage, restrooms, parking, patios/outdoor dining, delivery zone].

The Premises include the following exclusive/shared utilities: [Grease traps, hood systems, loading docks].

Permitted Use:

Option A: The Premises shall be used solely for the operation of a restaurant.

Option B: Permitted restaurant uses include: [Dine-in, Carryout, Bar, Catering, Banquet, Alcohol Service].

Tenant shall not use the Premises for any other purpose without Landlord’s prior written consent and municipal approval.

Lease Term:

Option A: The term of this Lease shall commence on [Start Date] and shall end on [End Date] (the “Term”).

Option B: Renewal/Extension: Tenant shall have the option to renew this Lease for [Number] additional term(s) of [Duration of Renewal Term] each, provided Tenant gives Landlord written notice of its intent to renew at least [Number] days prior to the expiration of the initial Term or then-current renewal term.

Option C: Holdover: If Tenant remains in possession of the Premises after the expiration of the Term, such holdover shall be construed as a month-to-month tenancy, subject to the terms and conditions of this Lease.

Option D: Early Termination:

In the event Tenant's business is forced to close permanently due to circumstances beyond Tenant’s control, including but not limited to health code violations leading to closure by the Health Department or revocation of necessary licenses (alcohol, health permit, etc.), Tenant may terminate this lease early by providing [Number] days written notice to the landlord.

Tenant will also need to provide documentary evidence supporting the closure like official order or notice from relevant authorities.

Rent:

Option A: Base Rent: The base rent shall be [Dollar Amount] per month, payable in advance on the first day of each month.

Option B: Rent Escalation:

Fixed: The base rent shall increase by [Percentage]% on [Date] of each year.

Percentage: The base rent shall be adjusted based on the Consumer Price Index (CPI) for [Region], as published by the U.S. Department of Labor, with adjustments occurring [Frequency, e.g., annually].

CPI: The base rent shall increase annually based on the CPI increase of the prior year.

Option C: Security Deposit: Tenant shall deposit with Landlord a security deposit of [Dollar Amount], which shall be held by Landlord as security for the performance of Tenant’s obligations under this Lease.

Option D: Late Fees: If rent is not paid within [Number] days after the due date, Tenant shall pay a late fee of [Dollar Amount].

Option E: Accepted Payment Methods: Rent payments shall be made by [Check, Electronic Transfer, etc.].

Option F: Taxes: Tenant is responsible for payment of all applicable Michigan taxes, including sales and use tax and local restaurant-specific assessments.

Percentage Rent (If Applicable):

Option A: In addition to the base rent, Tenant shall pay percentage rent equal to [Percentage]% of gross sales exceeding [Dollar Amount] per [Month/Year].

Option B: Gross sales exclusions: [e.g., employee meals, discounts, taxes].

Option C: Tenant shall provide Landlord with monthly sales reports within [Number] days after the end of each month. Landlord shall have the right to audit Tenant’s sales records upon [Number] days’ notice.

Utilities:

Option A: Tenant shall be responsible for all utility charges, including gas, water, electricity, garbage, sewage, fire suppression, and HVAC maintenance.

Option B: Equipment-specific utilities: Tenant shall be responsible for utilities related to walk-ins, hood systems, and rooftop units.

Maintenance and Repairs:

Option A: Landlord Responsibilities: Landlord shall maintain the roof, foundation, and exterior walls of the Premises.

Option B: Tenant Responsibilities: Tenant shall be responsible for all interior maintenance, including HVAC, plumbing, kitchen equipment, grease traps, refrigeration units, pest control, and fire suppression systems. Tenant shall also maintain third-party maintenance contracts for restaurant-specific fixtures.

Option C: Tenant is responsible for maintaining the Grease Trap and shall use a licensed service for such maintenance.

Tenant Improvements:

Option A: Tenant shall obtain Landlord’s prior written approval for any tenant improvements, including kitchen fixture installation, ventilation/hood adaptation, dining area build-outs, fire suppression system upgrades, and ADA modifications.

Option B: All improvements shall be performed by licensed and insured Michigan contractors, and Tenant shall obtain all necessary local permits and post-construction inspections.

Option C: Upon termination of this Lease, Tenant shall restore the Premises to its original condition, unless otherwise agreed in writing.

Compliance with Laws:

Tenant shall comply with all applicable Michigan and local health department standards, safety codes, fire codes, Michigan Liquor Control Commission rules (if applicable), and food service regulations.

Tenant is responsible for the maintenance and upkeep of its commercial cooking equipment including fire suppression systems and range hoods.

Licenses and Permits:

Tenant shall be responsible for obtaining, maintaining, and displaying all necessary licenses, health permits, food handler certifications, alcohol licenses, and certificate of occupancy.

Tenant is responsible for proper notification to the landlord of any suspension of their licenses

Taxes:

Tenant shall be responsible for all applicable taxes, including property, personal property, restaurant/food sales, use tax, and alcohol tax, per Michigan Department of Treasury rules.

Signage:

Option A: Tenant shall have the right to install signage, subject to Landlord’s approval and compliance with local codes.

Option B: All signage must be approved by Landlord and the relevant city/municipality.

Garbage and Trash:

Tenant shall be responsible for garbage, trash, and recycling storage and pick-up in compliance with local ordinances and health codes, including proper grease disposal.

Insurance:

Tenant shall maintain restaurant general liability, property damage, fire, liquor liability (if applicable), product liability, and workers’ compensation insurance, naming Landlord as an additional insured where appropriate.

Building Access and Operation:

Tenant shall comply with any building access rules, hours of operation limitations, noise/odor/ventilation management, music/patio usage, and delivery vehicle access restrictions.

Landlord Access:

Landlord shall have the right to access the Premises for inspection, repairs, code compliance, and health/safety checks, with reasonable notice, except in emergencies.

Hazardous Materials:

Tenant shall not store or use any hazardous materials on the Premises without Landlord’s prior written consent and in compliance with all applicable regulations. Tenant shall maintain compliant hood/venting/grease systems and conduct self-inspections.

Subletting and Assignment:

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

Default and Remedies:

In the event of a breach by Tenant, including non-payment of rent, code or health violations, failure to maintain, or abandonment, Landlord shall have the right to re-enter the Premises and terminate this Lease, subject to applicable Michigan commercial eviction procedures.

Security Deposit:

Upon termination of this Lease, Landlord shall return the security deposit to Tenant, less any deductions for repairs, cleaning, or unpaid rent, as permitted by Michigan law.

Telecommunications and Security:

Tenant shall have the right to install telecommunications, point-of-sale, and security systems, subject to Landlord’s approval and compliance with local codes.

Indemnification:

Tenant shall indemnify and hold Landlord harmless from any claims arising from Tenant’s operation of the restaurant, including food safety, patron safety, health department actions, liquor law violations, and third-party claims.

Casualty:

In the event of fire, flood, or utility failure, rent shall abate proportionally, and the parties shall coordinate insurance claims and responsibility for equipment/property replacement.

End of Term:

Upon termination of this Lease, Tenant shall remove all restaurant-specific fixtures, equipment, grease traps, and signage, and return the Premises in a sanitary condition, subject to a final health inspection.

Notices:

All notices shall be in writing and delivered to the parties at the addresses listed above.

Dispute Resolution:

Any disputes arising under this Lease shall be resolved through negotiation, mediation, or binding arbitration, or in Michigan commercial court, and shall be governed by Michigan law.

Governing Law:

This Lease shall be governed by and construed in accordance with the laws of the State of Michigan.

Compliance:

This Agreement is intended to comply with all applicable Michigan commercial real estate law, local zoning, health and safety regulations, ADA, tax, environmental, and fire code requirements.

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

[Landlord Signature]

[Landlord Printed Name]

[Tenant Signature]

[Tenant Printed Name]