North Carolina retail lease agreement template

North Carolina Retail Lease Agreement

This North Carolina Retail Lease Agreement (the "Agreement") is made and entered into as of this [Date] by and between:

Landlord: [Landlord Legal Name], whose address is [Landlord Address], and whose contact information is [Landlord Phone Number] and [Landlord Email Address].

Tenant: [Tenant Legal Name], whose address is [Tenant Address], and whose contact information is [Tenant Phone Number] and [Tenant Email Address].

WHEREAS, Landlord owns certain real property located in [City], North Carolina, and desires to lease a portion of said property to Tenant for retail purposes; and

WHEREAS, Tenant desires to lease said portion of the property from Landlord for retail purposes, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Leased Premises

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

Option A: A retail space consisting of approximately [Square Footage] square feet located at [Property Address], Unit/Suite Number [Unit/Suite Number], Parcel ID [Parcel ID], with boundaries as described in Exhibit A attached hereto and incorporated herein.

Option B: The property outlined in Exhibit A (site plan) and described as [Legal Description of the Property].

The Premises includes the following:

List Item 1: Frontage: Approximately [Frontage Length] linear feet.

List Item 2: Layout: [Description of Layout].

List Item 3: Parking: [Number] parking spaces allocated to Tenant.

Tenant shall have the right to use the following common areas: sidewalks, restrooms, loading docks, signage areas designated for tenant use, shared parking areas, dumpster areas, and utility chases.

Exclusive Use:

Option A: Tenant shall have the exclusive right to operate a [Type of Retail Business] business within a [Radius Distance] radius of the Premises. Landlord agrees not to lease space to any other tenant operating a similar business.

Option B: No exclusive use granted. Landlord retains the right to lease to businesses of a similar type.

2. Permitted Use

Tenant shall use the Premises solely for the purpose of operating a [Type of Retail Business] business, selling [Description of Products/Services].

Hours of Operation: [Hours of Operation].

Compliance: Tenant shall comply with all city zoning and local business use restrictions.

Prohibited Uses:

List Item 1: Unauthorized change of business.

List Item 2: Illegal activities.

List Item 3: Non-retail use.

List Item 4: If applicable: the sale of alcohol or tobacco without proper permits.

3. Lease Term

Initial Term: [Number] years, commencing on [Commencement Date] and expiring on [Expiration Date].

Fixturization/Construction Period:

Option A: [Number] days for tenant build-out, commencing on [Date]. Rent abatement applies during this period.

Option B: No fixturization/construction period.

Renewal/Extension Options:

Option A: Tenant shall have the option to renew this Lease for [Number] additional term(s) of [Number] years each, provided Tenant gives Landlord written notice of its intention to renew at least [Number] months prior to the expiration of the then-current term. Rent for each renewal term shall be [Description of Rent Adjustment Mechanism, e.g., fair market value, CPI increase].

Option B: No renewal option.

Holdover: If Tenant remains in possession of the Premises after the expiration or termination of this Lease, such occupancy shall be deemed a month-to-month tenancy, subject to all of the terms and conditions of this Lease, except that the rent shall be [Percentage]% of the then-current rent.

4. Rent

Base Rent: [Dollar Amount] per month, payable in advance on the [Day] day of each month.

Escalation Clause:

Option A: Fixed Increases: The base rent shall increase by [Percentage]% on each anniversary of the Commencement Date.

Option B: CPI Adjustments: The base rent shall be adjusted annually based on the Consumer Price Index (CPI).

Option C: Percentage Rent: In addition to the base rent, Tenant shall pay Landlord [Percentage]% of its gross sales exceeding [Dollar Amount] per year.

Payment Method and Location: Rent shall be paid to Landlord at [Payment Address] via [Payment Method, e.g., check, electronic transfer].

Late Payment Penalties: A late fee of [Dollar Amount] shall be charged for any rent payment received more than [Number] days after the due date.

Returned Check Fees: A fee of [Dollar Amount] shall be charged for any returned check.

Taxes:

Option A: Tenant shall be responsible for all applicable North Carolina state and local sales taxes.

Option B: Landlord shall be responsible for all applicable North Carolina state and local property taxes.

Tax Escalation: Tenant shall pay its pro rata share of any increase in property taxes over the base year of [Year].

CAM Charges: Tenant shall pay its pro rata share of Common Area Maintenance (CAM) charges, as detailed in Section 6.

5. Security Deposit

Amount: [Dollar Amount].

Purpose: To secure Tenant's performance of its obligations under this Lease.

Holding/Interest: Landlord shall hold the Security Deposit in accordance with North Carolina law. No interest will be paid on the deposit.

Conditions for Withholding: Landlord may withhold from the Security Deposit amounts necessary to cover unpaid rent, damages to the Premises beyond normal wear and tear, and other amounts due under this Lease.

Procedures for Return: Landlord shall return the Security Deposit, less any deductions, within [Number] days after Tenant vacates the Premises, pursuant to NCGS § 42-52.

6. Operating Expenses

Tenant's Share: Tenant shall pay [Percentage]% of the following operating expenses: taxes, insurance, CAM fees, utility allocation/submetering (water, gas, electric, HVAC, trash, stormwater), management fees, repairs and maintenance, and capital expenditure pass-throughs.

Payment Method: [Payment Method, e.g., Monthly, Quarterly].

CAM Fees include: [List of Included Items].

Utility Allocation:

Option A: Utilities are submetered and billed directly to Tenant.

Option B: Utilities are allocated based on Tenant's square footage.

7. Tenant Improvement (TI) and Buildout

Plans and Approval: Tenant shall submit plans for its buildout to Landlord for approval, which shall not be unreasonably withheld.

Allowance:

Option A: Landlord shall provide a TI allowance of [Dollar Amount].

Option B: No TI allowance provided.

Landlord's Contribution: [Description of Landlord's Contribution, if any].

Required Standards and Permits: Tenant shall be responsible for obtaining all necessary permits and ensuring that the buildout complies with all applicable codes, including the North Carolina State Building Code and ADA standards.

Delivery Condition: The Premises shall be delivered in [Description of Delivery Condition, e.g., "shell condition," "as-is"].

8. Repair and Maintenance

Landlord's Responsibilities: Landlord shall be responsible for maintaining the roof, structure, and common areas.

Tenant's Responsibilities: Tenant shall be responsible for maintaining the interior of the Premises, including glass/storefront, fixtures, and equipment.

Notice of Damages: Tenant shall promptly notify Landlord of any damages to the Premises.

Pest Control: Tenant is responsible for pest control within the premises.

Retail-Specific Maintenance: Tenant is responsible for grease trap maintenance (if applicable), landscaping immediately adjacent to the premises, and snow/ice removal in front of its storefront.

9. Signage

Tenant's Rights: Tenant shall have the right to install signage in the following locations: [Description of Signage Locations].

Restrictions: All signage shall comply with local ordinances and Landlord's sign criteria, as outlined in Exhibit B.

Approval: Tenant must obtain Landlord's approval for all signage design and placement.

Removal: Tenant shall remove its signage at the end of the Lease term and restore the Premises to its original condition.

10. Trash Removal and Recycling

Trash Removal: Tenant shall be responsible for its own trash removal.

Recycling: Tenant shall comply with all local recycling ordinances.

Compliance: Tenant shall comply with all Board of Health and fire marshal requirements regarding waste disposal.

11. Insurance

Tenant's Insurance: Tenant shall maintain commercial general liability insurance with a minimum limit of [Dollar Amount], property coverage, and business interruption insurance, naming Landlord as an additional insured.

Landlord's Insurance: Landlord shall maintain its own insurance coverage.

Compliance: Both parties shall comply with all applicable North Carolina insurance requirements.

12. Fire and Casualty

Obligations: In the event of damage or destruction to the Premises, Landlord shall repair the Premises within a reasonable time.

Rent Abatement: Rent shall abate during the period of repair if the Premises is untenantable.

Termination: If repairs cannot be completed within [Number] days, either party may terminate this Lease.

13. Alterations and Improvements

Restrictions: Tenant shall not make any structural or exterior alterations to the Premises without Landlord's prior written approval.

Code Compliance: All alterations must comply with applicable building codes and require necessary permits.

Mechanic's Lien Protection: Tenant shall take all necessary steps to protect Landlord from mechanic's liens arising from Tenant's work.

14. Assignment and Subletting

Restrictions:

Option A: Tenant shall not assign this Lease or sublet the Premises without Landlord's prior written consent, which shall not be unreasonably withheld.

Option B: Tenant shall not assign this Lease or sublet the Premises without Landlord's consent, which may be withheld in Landlord's sole discretion.

Recapture Rights: Landlord shall have the right to recapture the Premises upon Tenant's request to assign or sublet.

Permitted Transfers: This restriction shall not apply to transfers to an affiliate of Tenant.

15. Governmental Compliance

Business Licenses: Tenant shall obtain all required North Carolina and municipal business licenses.

ABC Permits: If applicable, Tenant shall obtain all necessary ABC permits for alcohol sales.

Zoning Compliance: Tenant shall comply with all applicable zoning regulations.

Continuous Operation: Tenant shall operate continuously during the Lease term.

"Go Dark" Provision: Tenant must operate within the agreed-upon hours. Failure may be a breach of this agreement.

16. Utility Interruption and Access

Utility Interruption: Landlord shall not be liable for any interruption of utilities.

Landlord's Access: Landlord shall have reasonable access to the Premises for inspection and repairs, with advance notice to Tenant, except in emergencies.

17. Applicable Laws

Compliance: This Lease shall be governed by and construed in accordance with the laws of the State of North Carolina.

Tenant agrees to comply with all applicable federal, state, county, and municipal laws/regulations impacting retail.

18. Remedies and Defaults

Material Breach: Failure to pay rent or perform any other material obligation under this Lease shall constitute a material breach.

Grace Period: Tenant shall have a [Number]-day grace period to cure any default.

Landlord's Right to Cure: Landlord shall have the right to cure any default by Tenant and charge Tenant for the cost thereof.

Eviction: Landlord may pursue eviction proceedings under North Carolina law (Summary Ejectment) in the event of a default.

Lien: Landlord shall have a lien on Tenant's personal property located on the Premises to secure payment of rent, subject to North Carolina law.

Attorneys' Fees: The prevailing party in any legal action shall be entitled to recover its reasonable attorneys' fees and costs.

19. Relocation and Co-Tenancy

Relocation:

Option A: Landlord shall have the right to relocate Tenant to another comparable space within the Shopping Center, with Landlord paying for all relocation costs.

Option B: No relocation clause.

Co-Tenancy:

Option A: If [Anchor Tenant] or [Percentage]% of the other tenants in the Shopping Center cease operating, Tenant shall have the right to reduce its rent or terminate this Lease.

Option B: No co-tenancy clause.

20. Move-In and Move-Out

Delivery Condition: The Premises shall be delivered in the condition described in Section 7.

Move-Out: Tenant shall surrender the Premises in good condition, broom clean, and free of debris.

Restoration: Tenant shall remove its fixtures and signs and restore the Premises to its original condition, reasonable wear and tear excepted.

21. Environmental Hazards

Prohibitions: Tenant shall not store or use any hazardous materials on the Premises without Landlord's prior written consent.

Reporting: Tenant shall promptly report any leaks or spills to Landlord.

Indemnification: Tenant shall indemnify Landlord for any environmental contamination caused by Tenant.

22. Business Interruption and Disaster

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

Rent Abatement: If the Premises is rendered untenantable due to a disaster, rent shall abate during the period of untenantability.

Termination: If the Premises cannot be restored within a reasonable time, either party may terminate this Lease.

23. Dispute Resolution

Negotiation: The parties shall first attempt to resolve any disputes through good-faith negotiation.

Mediation: If negotiation fails, the parties shall submit the dispute to non-binding mediation.

Governing Law: This Lease shall be governed by the laws of the State of North Carolina.

Venue: Any legal action shall be brought in [County Name] County, North Carolina.

Jurisdiction: All parties consent to jurisdiction in the State of North Carolina.

Jury Waiver: Landlord and tenant hereby waive their right to a jury trial.

24. Notice

Delivery Methods: All notices shall be in writing and delivered by certified mail, return receipt requested, or by personal delivery.

Addresses: Notices shall be sent to the addresses set forth in the introductory paragraph of this Lease.

25. Addenda

The following addenda are attached hereto and incorporated herein:

Exhibit A: Legal Property Description and Site Plan

Exhibit B: Rules and Regulations

Exhibit C: Tenant Buildout/Fit-up Scope (if applicable)

Exhibit D: Sample Estoppel Certificate

Exhibit E: Local Utility Agency Contacts

26. Miscellaneous

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

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

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

Landlord:

____________________________

[Landlord Legal Name]

Tenant:

____________________________

[Tenant Legal Name]