New Mexico commercial lease agreement template

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How New Mexico commercial lease agreement Differ from Other States

New Mexico requires specific disclosure of prior contamination if the premises were used for hazardous materials, which is not mandated in all states.
Unlike some states, New Mexico has no statutory limits on commercial security deposits, allowing parties to freely negotiate the amount.
New Mexico law permits commercial landlords to terminate leases with three days’ written notice for nonpayment, which is shorter than in many states.

Frequently Asked Questions (FAQ)

Q: Are commercial lease agreements in New Mexico required to be notarized?

A: No, notarization is not required for commercial leases in New Mexico, but it can add credibility and prevent disputes.
Q: Does New Mexico law impose rent control on commercial properties?

A: No, there are no statutory rent controls on commercial properties in New Mexico. Rent terms are negotiable between parties.
Q: How quickly can a landlord evict a commercial tenant for nonpayment in New Mexico?

A: A landlord may give three days’ written notice for nonpayment. If not cured, the eviction process can begin promptly thereafter.

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New Mexico Commercial Lease Agreement

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

Landlord's Entity Type:

Option A: Individual
Option B: Limited Liability Company (LLC)
Option C: Corporation
Option D: Other: [Specify Entity Type]

Tenant's Entity Type:

Option A: Individual
Option B: Limited Liability Company (LLC)
Option C: Corporation
Option D: Other: [Specify Entity Type]

1. Premises

The Landlord hereby leases to the Tenant, and the Tenant hereby leases from the Landlord, the following described premises (the "Premises"): [Property Address], Suite/Unit Number: [Suite/Unit Number].

Option A: Legal Description: [Legal Description of Property]
Option B: Square Footage: [Square Footage of Premises]

Permitted Use:

Option A: The Premises shall be used solely for the purpose of: [Description of Permitted Use].
Option B: Exclusive Use: Landlord grants Tenant the exclusive right to operate a [Type of Business] business within the [Specify Area, e.g., building, shopping center].

Common Areas:

Option A: Description of Common Areas: [Description of Common Areas]
Option B: Tenant's rights to use Common Areas: [Specify Tenant's Rights, e.g., parking, access]

Restrictions/Zoning:

Option A: Restrictions on Use: [Specify Restrictions, if any]
Option B: Zoning Limitations: [Specify Zoning Limitations]

2. Lease Term

The term of this Lease shall commence on [Start Date] and shall expire on [End Date].

Option A: Fixed Term: The Lease shall be for a fixed term as specified above.
Option B: Period-to-Period Tenancy: The Lease shall be a [e.g., month-to-month] tenancy, commencing on [Start Date].
Option C: Automatic Renewal: The Lease shall automatically renew for successive terms of [Number] [Months/Years], unless either party provides written notice of termination at least [Number] days prior to the end of the then-current term.

Early Possession:

Option A: Tenant shall be entitled to early possession of the Premises on [Date].
Option B: No early possession is granted.

Holdover:

Option A: If Tenant remains in possession of the Premises after the expiration or termination of this Lease, such occupancy shall be a month-to-month tenancy, subject to all the terms and conditions of this Lease, but at a rental rate equal to [Percentage]% of the then-current Base Rent.
Option B: Holdover requires Landlord's written consent.

Option to Renew/Extend:

Option A: Tenant shall have the option to renew/extend the Lease for [Number] additional term(s) of [Number] [Months/Years] each, provided Tenant gives Landlord written notice of its intention to renew/extend at least [Number] days prior to the expiration of the then-current term. The rental rate for the renewal/extension term(s) shall be [Specify Method of Determining Rent, e.g., fair market value, increase by percentage].
Option B: No option to renew/extend.

3. Rent

The Tenant shall pay to the Landlord as Base Rent for the Premises the sum of [Dollar Amount] per [Month/Year], payable in advance on the [Day] day of each [Month/Year], commencing on [Date].

Option A: Payment Schedule: Payments shall be made [e.g., monthly, quarterly, annually].
Option B: Initial Payment: The first month's rent, in the amount of [Dollar Amount], shall be due upon execution of this Lease.

Acceptable Payment Methods:

Option A: Rent shall be paid by [e.g., check, money order, electronic transfer].
Option B: Electronic transfer is required.

Escalations/Increases:

Option A: Annual Percentage Increase: The Base Rent shall increase by [Percentage]% on each anniversary of the commencement date.
Option B: CPI Adjustment: The Base Rent shall be adjusted annually based on the Consumer Price Index (CPI) for [Specific CPI Index].
Option C: Step-Up: The Base Rent shall increase to [Dollar Amount] on [Date].

Proration:

Option A: Rent for any partial month shall be prorated on a daily basis.
Option B: No proration of rent.

Late Fees/Penalties:

Option A: If rent is not received within [Number] days of the due date, a late fee of [Dollar Amount] shall be charged.
Option B: Interest shall accrue on past due rent at a rate of [Percentage]% per annum.

4. Security Deposit

The Tenant shall deposit with the Landlord the sum of [Dollar Amount] as a security deposit to secure the Tenant's performance of the terms and conditions of this Lease.

Option A: Conditions for Withholding/Retention: Landlord may withhold or retain the security deposit to cover damages to the Premises, unpaid rent, or other costs incurred by Landlord as a result of Tenant's breach of this Lease.
Option B: Timeline for Return: The security deposit, less any deductions, shall be returned to Tenant within [Number] days after the termination of this Lease and Tenant's surrender of the Premises.
Option C: Permitted Deductions: Landlord may deduct from the security deposit for: [List of Permitted Deductions]

New Mexico Specific Escrow/Handling Rules:

Option A: The Security Deposit shall be held in a separate account at [Bank Name].
Option B: No specific escrow requirements.

5. Additional Pass-Throughs/Operating Expenses

Option A: Gross Lease: Landlord shall pay all operating expenses of the Premises, including property taxes, insurance, and common area maintenance.
Option B: Triple Net (NNN) Lease: In addition to the Base Rent, Tenant shall pay its proportionate share of the following operating expenses: property taxes, insurance, utilities, and common area maintenance (CAM). Tenant's proportionate share shall be [Percentage]%.
Option C: Modified Gross Lease: In addition to the Base Rent, Tenant shall be responsible for the following expenses: [List of Expenses Tenant Pays]. Landlord shall be responsible for all other operating expenses.

Property Taxes:

Option A: Tenant's Share of Property Taxes: [Percentage]%
Option B: Landlord's Responsibility

Insurance:

Option A: Tenant's Share of Insurance: [Percentage]%
Option B: Landlord's Responsibility

Utilities:

Option A: Tenant's Responsibility: Tenant shall be responsible for all utilities serving the Premises.
Option B: Landlord's Responsibility for certain utilities: [Specify Utilities]

Common Area Maintenance (CAM):

Option A: Tenant's Share of CAM: [Percentage]%
Option B: Landlord's Responsibility

Capital Improvements:

Option A: Tenant shall be responsible for a portion of the costs of capital improvements to the property in an amount not to exceed [Dollar Amount].
Option B: Landlord is responsible for capital improvements.

Association Fees:

Option A: Tenant shall reimburse the Landlord for all association fees paid by the Landlord, due to any association that the property is subjected to.
Option B: Landlord is responsible for association fees.

Reconciliation:

Option A: Landlord shall provide Tenant with an annual reconciliation of operating expenses within [Number] days after the end of each calendar year. Any overpayment by Tenant shall be credited to Tenant's next rent payment, and any underpayment by Tenant shall be due within [Number] days of Landlord's invoice.
Option B: No Reconciliation Required.

6. Maintenance and Repair

Landlord's Responsibilities:

Option A: Landlord shall maintain and repair the roof, exterior walls, and common areas of the Premises.
Option B: Landlord's responsibilities exclude: [List of exclusions]

Tenant's Responsibilities:

Option A: Tenant shall maintain and repair the interior of the Premises, including but not limited to fixtures, equipment, and plumbing.
Option B: Tenant is not responsible for: [List of exclusions]

Systems (HVAC, Plumbing, Electrical):

Option A: Landlord is responsible for HVAC, Plumbing, and Electrical systems.
Option B: Tenant is responsible for HVAC, Plumbing, and Electrical systems.

Reporting/Notification Requirements:

Option A: Tenant shall promptly notify Landlord of any needed repairs.
Option B: Notifications shall be made in writing within [Number] days of discovery.

Alterations/Improvements:

Option A: Tenant shall not make any alterations or improvements to the Premises without Landlord's prior written consent.
Option B: Landlord's approval shall not be unreasonably withheld.

7. Alterations, Signage, and Fixtures

Alterations:

Option A: Tenant Improvements Permitted: Tenant may make improvements to the property with Landlord's prior written approval.
Option B: Tenant Improvements not Permitted.

Signage:

Option A: Tenant shall have the right to install signage, subject to Landlord's approval of size, location, and design.
Option B: No signage is permitted.

Fixtures:

Option A: Trade Fixtures: Trade fixtures installed by Tenant shall remain Tenant's property and may be removed by Tenant upon termination of the Lease, provided Tenant restores the Premises to its original condition.
Option B: All fixtures become property of Landlord.

Restoration Obligations:

Option A: Upon termination, Tenant must remove all alterations and improvements and restore the Premises to its original condition.
Option B: Landlord's Option: Landlord may elect to have Tenant leave alterations and improvements, in which case Tenant shall not be obligated to restore the Premises.

8. Permitted Use and Exclusivity

Permissible Business Activities:

Option A: Tenant shall use the Premises only for the Permitted Use described in Section 1.
Option B: Tenant may use the premises for any legal business.

Special Licenses Required:

Option A: Tenant is solely responsible for obtaining all necessary licenses and permits to operate its business on the Premises.
Option B: Landlord assists with licenses: [Specify Landlord's Obligations]

Prohibited Uses:

Option A: Tenant shall not use the Premises for any unlawful purpose or in any way that creates a nuisance.
Option B: Prohibited Uses: [List of Prohibited Uses]

Hazardous Substances:

Option A: Tenant shall not store, use, or dispose of any hazardous substances on the Premises in violation of any federal, state, or local law. Tenant shall indemnify Landlord against any claims arising from Tenant's use of hazardous substances.
Option B: Landlord responsible for existing substances: [Specify Landlord's Obligations]

Exclusive Use (If Applicable):

Option A: Landlord agrees not to lease any other space in the [Building/Shopping Center] to a business that directly competes with Tenant's business of [Type of Business].
Option B: No Exclusive Use is Granted.

9. Occupancy and Subletting/Assignment

Assignment/Subletting Permitted:

Option A: Tenant may assign this Lease or sublet the Premises with Landlord's prior written consent, which shall not be unreasonably withheld.
Option B: Assignment/Subletting Requires Landlord's Consent: Tenant may not assign this Lease or sublet the Premises without Landlord's prior written consent, which may be granted or withheld in Landlord's sole discretion.
Option C: No Assignment/Subletting.

Landlord's Consent Requirements:

Option A: Landlord's consent shall not be unreasonably withheld.
Option B: Landlord's consent may be subject to certain conditions, such as the assignee/sublessee having a similar financial standing as the Tenant.

Effect of Transfer on Liability:

Option A: Any assignment or subletting shall not relieve Tenant of its obligations under this Lease.
Option B: Release of Liability: Upon assignment with Landlord's consent, Tenant shall be released from all further liability under this Lease.

Recapture Rights:

Option A: Landlord shall have the right to recapture the Premises upon Tenant's request to assign or sublet.
Option B: No Recapture Rights.

Subordination by Landlord:

Option A: Landlord may subordinate this Lease to any mortgage or deed of trust.
Option B: Landlord will obtain a Non-Disturbance Agreement from any future lender.

10. Insurance

Required Insurance Types:

Option A: Tenant shall maintain Commercial General Liability insurance, Property insurance, and Business Interruption insurance, with minimum coverage amounts of [Dollar Amount].
Option B: Landlord responsible for property insurance.
Option C: Tenant is required to carry workers' compensation insurance: [If required by New Mexico law].

Minimum Coverage Amounts:

Option A: Commercial General Liability: [Dollar Amount]
Option B: Property Insurance: [Dollar Amount]
Option C: Business Interruption: [Dollar Amount]

Waiver of Subrogation:

Option A: Landlord and Tenant hereby waive all rights of subrogation against each other.
Option B: No Waiver of Subrogation.

Proof of Insurance:

Option A: Tenant shall provide Landlord with a certificate of insurance evidencing the required coverage prior to the commencement date of this Lease and upon each renewal of the insurance policy.
Option B: Tenant shall provide thirty (30) days notice before changing or cancelling insurance coverage.

Allocation of Liability:

Option A: Landlord and Tenant shall each be responsible for their own acts and omissions.
Option B: Tenant shall be responsible for [Specify Events].

11. Indemnification

Hold Harmless Provision:

Option A: Tenant shall indemnify and hold Landlord harmless from any and all claims, losses, damages, and liabilities arising from Tenant's use of the Premises or Tenant's breach of this Lease.
Option B: Landlord shall indemnify and hold Tenant harmless from any and all claims, losses, damages, and liabilities arising from Landlord's negligence.

Damage Waivers:

Option A: Landlord shall not be liable for any damage to Tenant's personal property located on the Premises, except to the extent caused by Landlord's negligence.
Option B: Tenant is responsible for all damages to Tenant's property.

Obligations Following Third-Party Claims:

Option A: Tenant shall defend, indemnify, and hold Landlord harmless from any third-party claims arising from Tenant's use of the Premises.
Option B: Landlord shall be responsible for defending any third-party claims arising from Landlord's actions.

12. Casualty and Condemnation

Fire/Natural Disaster:

Option A: In the event of fire or other casualty damage to the Premises, Landlord shall repair the Premises within [Number] days, unless the damage is so extensive as to render the Premises untenantable.
Option B: If Landlord does not repair the Premises within [Number] days, Tenant may terminate this Lease.

Rent Abatement:

Option A: Rent shall abate during any period of untenantability caused by casualty damage.
Option B: No rent abatement.

Repair/Restoration Duties:

Option A: Landlord shall be responsible for repairing the Premises.
Option B: Tenant shall be responsible for repairing the Premises.

Termination Options:

Option A: If the Premises are substantially damaged or destroyed, either party may terminate this Lease.
Option B: Lease will continue even if the premises are substantially damaged.

Condemnation/Eminent Domain:

Option A: If the Premises are taken by eminent domain, this Lease shall terminate.
Option B: Landlord shall be entitled to all compensation awarded for the taking, but Tenant shall be entitled to compensation for its loss of business.

13. Access and Inspection

Notice Requirements:

Option A: Landlord shall provide Tenant with at least [Number] hours' notice prior to entering the Premises, except in cases of emergency.
Option B: 24 hours' notice required for all inspections.

Emergency Entry:

Option A: Landlord may enter the Premises without notice in cases of emergency.
Option B: Emergency Entry only when Tenant cannot be reached.

Limitations:

Option A: Landlord shall not unreasonably interfere with Tenant's business operations.
Option B: Landlord shall only enter during regular business hours.

14. Default and Remedies

Events of Default:

Option A: Nonpayment of rent, breach of use restrictions, or any other material breach of this Lease shall constitute an event of default.
Option B: Default requires written notice.

Required Notices/Cure Periods:

Option A: Landlord shall provide Tenant with written notice of any default and a [Number] day opportunity to cure the default.
Option B: No cure period.

Landlord's Remedies:

Option A: Upon Tenant's default, Landlord may terminate this Lease, re-enter the Premises, and/or pursue any other remedies available at law or equity, including eviction, acceleration of rent, and recovery of damages.
Option B: Landlord's remedies limited to: [Specify Limitations]

Tenant's Right to Cure:

Option A: Tenant shall have the right to cure any default within the cure period specified in this Lease.
Option B: Tenant does not have the right to cure, other than for non-payment of rent.

Tenant's Remedies for Landlord Default:

Option A: Tenant shall provide Landlord with written notice of any default and a [Number] day opportunity to cure the default. If Landlord fails to cure the default within the cure period, Tenant may pursue any remedies available at law or equity, including termination of this Lease and recovery of damages.
Option B: Tenant's remedy limited to: [Specify Limitations]

New Mexico Specific Requirements:

Option A: Landlord must comply with New Mexico's requirements for "Notice to Quit" and unlawful detainer actions.
Option B: Landlord must follow summary possession procedure.

15. Surrender and Restoration

Move-Out Procedures:

Option A: Tenant shall surrender the Premises to Landlord in broom-clean condition upon termination of this Lease.
Option B: Tenant must provide written notice of intent to vacate [Number] days before the termination date.

Restoration Obligations:

Option A: Tenant shall remove all personal property and repair any damage caused by Tenant's occupancy.
Option B: Landlord responsible for removal of alterations.

Abandonment Standards:

Option A: If Tenant vacates the Premises without notice and fails to pay rent, Landlord may deem the Premises abandoned.
Option B: Abandonment requires [Number] days of non-occupancy.

Treatment of Property Left Behind:

Option A: Landlord may dispose of any personal property left behind by Tenant after providing Tenant with written notice and a reasonable opportunity to retrieve the property.
Option B: Landlord may store the property at Tenant's expense.

16. Option Rights

Rights of First Refusal:

Option A: Tenant shall have the right of first refusal to lease any adjacent space that becomes available during the term of this Lease.
Option B: Landlord will provide written notice of availability.
Option C: No Right of First Refusal.

Expansion Rights:

Option A: Tenant shall have the option to expand the Premises by leasing additional space in the [Building/Shopping Center].
Option B: Tenant must exercise expansion right within [Number] days of notice.
Option C: No Expansion Rights.

Purchase Options:

Option A: Tenant shall have the option to purchase the Premises at a price to be determined by a third-party appraisal.
Option B: Tenant must exercise purchase option by [Date].
Option C: No Purchase Option.

Renewal Options:

Option A: Tenant shall have the option to renew this Lease for an additional term of [Number] years.
Option B: See Section 2.

17. Subordination, Non-Disturbance, and Attornment (SNDA)

Subordination:

Option A: This Lease shall be subordinate to any existing or future mortgage or deed of trust on the Premises.
Option B: Landlord will use best efforts to obtain a Non-Disturbance Agreement.

Non-Disturbance:

Option A: Landlord shall use commercially reasonable efforts to obtain a non-disturbance agreement from any mortgagee.
Option B: Tenant's lease survives foreclosure.

Attornment:

Option A: Tenant agrees to attorn to any successor owner of the Premises.
Option B: Tenant agrees to recognize new landlord.

18. Estoppel Certificate

Requirement:

Option A: Tenant shall execute and deliver an estoppel certificate within [Number] days of Landlord's request.
Option B: Estoppel Certificate required for sale only.

Timing:

Option A: Within [Number] days of Landlord's request.
Option B: Within [Number] days of lender's request.

Form/Content:

Option A: The estoppel certificate shall be in a form reasonably acceptable to Landlord.
Option B: The estoppel certificate shall include a statement of the term of the lease, the rent being paid, and whether there are any defaults.

19. Environmental Matters

Hazardous Materials Restrictions:

Option A: Tenant shall not store, use, or dispose of any hazardous materials on the Premises in violation of applicable law.
Option B: Landlord represents that no hazardous materials are present on the premises to the best of their knowledge.

Mandatory Disclosures:

Option A: Landlord discloses that the Premises [does/does not] contain lead-based paint.
Option B: Landlord discloses that the Premises [does/does not] have radon levels above the EPA's action level.

Indemnity:

Option A: Tenant shall indemnify Landlord against any claims arising from Tenant's use of hazardous materials.
Option B: Landlord indemnifies Tenant for pre-existing conditions.

Compliance with Environmental Standards:

Option A: Tenant shall comply with all applicable environmental laws and regulations.
Option B: Landlord shall assist Tenant in complying with environmental laws and regulations.

20. Compliance with Laws

Americans with Disabilities Act (ADA):

Option A: Tenant shall be responsible for complying with the ADA.
Option B: Landlord shall be responsible for complying with the ADA.

State and Municipal Business Regulations:

Option A: Tenant shall comply with all state and municipal business regulations.
Option B: Landlord is responsible for zoning compliance.

Licensing:

Option A: Tenant is responsible for obtaining all necessary licenses and permits.
Option B: Landlord warrants that Tenant's business is a permitted use.

Special Requirements in New Mexico:

Option A: Tenant shall comply with all applicable New Mexico laws and regulations.
Option B: Compliance with the Americans with Disabilities Act is the responsibility of the [Landlord/Tenant].

21. Dispute Resolution

Mediation:

Option A: Any dispute arising out of this Lease shall be submitted to mediation prior to litigation.
Option B: Mediation is optional.

Arbitration:

Option A: Any dispute arising out of this Lease shall be submitted to binding arbitration.
Option B: Arbitration is not required.

Litigation:

Option A: Any legal action arising out of this Lease shall be brought in the courts of [County Name] County, New Mexico.
Option B: Exclusive venue in New Mexico.

Choice of Law/Venue:

Option A: This Lease shall be governed by and construed in accordance with the laws of the State of New Mexico.
Option B: Venue shall be in [Specify County] County, New Mexico.

22. Notice Requirements

Permitted Methods:

Option A: Notices may be given by mail, email, or personal delivery.
Option B: Certified mail required for all notices of default.

Addresses for Service:

Option A: Landlord's Address: [Lessor Address]
Option B: Tenant's Address: [Lessee Address]

Effective Dates:

Option A: Notices shall be deemed effective upon receipt.
Option B: Notices sent by certified mail shall be deemed effective three days after mailing.

23. Miscellaneous

Entire Agreement: This Lease constitutes the entire agreement between the parties and supersedes all prior negotiations and understandings.

Amendments: Any amendment to this Lease must be in writing and 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.

Force Majeure: Neither party shall be liable for any delay or failure to perform its obligations under this Lease due to force majeure events.

Waiver: No waiver of any provision of this Lease shall be effective unless in writing and signed by the waiving party.

Relationship of the Parties: This Lease does not create a partnership or joint venture between the parties.

Successors/Assigns: This Lease shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

24. Additional New Mexico Specific Disclosures

Gross Receipts Tax:

Option A: Tenant shall be responsible for paying all applicable New Mexico gross receipts tax on rent payments.
Option B: Landlord is responsible for collecting and remitting gross receipts tax.

Environmental/Cultural Resource Protections:

Option A: Tenant shall comply with all applicable New Mexico environmental and cultural resource protection laws.
Option B: Landlord to provide environmental assessment.

New Mexico Uniform Owner-Resident Relations Act:

Option A: The New Mexico Uniform Owner-Resident Relations Act [does/does not] apply to this commercial lease.
Option B: Landlord and Tenant waive portions of the Uniform Owner-Resident Relations Act related to residential property.

Local Business Licenses:

Option A: Tenant is responsible for obtaining all required local business licenses.
Option B: Landlord to provide list of required local business licenses.

Special Economic Zone Considerations: