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A commercial lease agreement must be drawn up if a business is leasing a property. Because a commercial contract will have a lengthier lease term than residential leases, it is essential to include important information. However, if you've never drawn up one of these leases, knowing where to start can be a challenge, which is why we have created this guide to help you build a rental contract that will set the tone for your relationship with your tenant.

Suppose you don't want to go through the trouble of creating your commercial lease agreement yourself. In that case, you can use DoorLoop to create a professional contract quickly and easily. Contact us today to book a free demo or learn more!

Commercial Agreements

A company and a landlord enter into a documented, signed agreement known as a Georgia commercial lease agreement when leasing retail, industrial, or office space in exchange for monthly rent. This kind of agreement is much more intricate than a residential lease.

Due to the business nature of the property and the lease, some differences may require defining protections for both parties. Guarantors are often used, for example, as a form of protection, particularly if the tenant has a poor credit score.

Types of Contracts

As with most other states, there are three main types of commercial lease agreements. They are:

  • Triple Net Lease Agreement. The lessee or tenant is responsible for covering all property expenses in a triple net lease agreement. This includes taxes, rent, insurance, and other costs related to the shared space.
  • Gross Lease Agreements. With a gross contract, the tenant pays the monthly rent while the landlord uses this rental payment to pay the insurance, tax, and maintenance costs for the shared areas.
  • Modified Gross Lease. This lease agreement is a cross between the two types. Here, both parties can negotiate which expenditures each will cover. A tenant may make their rent payment in addition to insurance, for example, while the landlord will cover the property tax and other expenses. 

Georgia Leases

Because a lease agreement is a binding document, it is essential that it include specific information. This will safeguard you and the tenant and help establish boundaries and responsibilities. Before signing the document, it is important that both parties agree to its terms. Here's what you'll need to include in your lease agreement:

Personal and Property Information

First, the identities of the parties involved must be listed as the first item in a commercial rental contract.

The names of the property owner and the tenant, along with any relevant contact details for both parties must appear in the introduction. Other individuals or entities that are authorized to act on behalf of the landlord must also be listed.

This includes property managers and realtors. Commercial lease agreement descriptions must provide business information, and details about the shared or single tenant facilities. Ensure that you also include the address of the rental property in this section.

Business Hours

Every business's operating hours must be mentioned in the agreement in some way. This portion of the contract is used to establish when a company might anticipate customers as well as when the renter is most likely to be on-site. Having this information on hand will help the owner in determining the most effective time to get in touch with the tenant.

Terms and Conditions

Because a Georgia commercial lease agreement is applicable for a fixed period, the start and end dates (referred to as the lease term) must be specified in the "Terms" section.

Furthermore, a provision describing how many days, weeks, or months’ notice must be given before a renter vacates should be included. Usually, a 60-day window is advised. Finally, in addition to the monthly rent, the annual rental amount should also be specified here.

Utilities

The cost to maintain the facility can vary depending on the type of rental agreement. Therefore, the contract will define who is responsible for paying expenses such as maintenance, insurance, and property taxes. Typically, the tenant must pay for amenities, including electricity, water, gas, sewage, and heat. This can be detailed in the "Utilities" section.

Repairs By the Tenant

Upgrades might be necessary during the lease's duration. Generally, the renter can enhance the facility through repairs and modifications as long as there is explicit consent from the landlord. Here, you can include sections describing alterations, repairs that the tenant can make, and the upgrades a landlord is responsible for.

Security Deposit

In most lease agreements, the tenant must provide a security deposit to guarantee fulfillment of the lease's obligations. Typically, this amount will not be the maximum amount for which the tenant is liable.

Signed By

Once an agreement has been reached concerning the lease of a commercial property, it is crucial that both parties sign and date the contract for it to be enforceable. There needs to be an area for the lessor and lessee to put their names and signatures. When using a guarantor, he or she will also have to add their signature.

Disclosures

When drawing up your commercial lease agreement, here are some of the things you will have to disclose:

  • The Intended Use of the Property. To begin with, the contract should fully describe the business's function. This will specify the area that will be used and the type of business that will be conducted there. The document must clearly state that the tenant would be in violation of the agreement if any other kind of business—legal or illegal—took place on the property. Therefore, to provide protection, the landlord may choose to use restrictive phrasing in this section of the contract.
  • Abandonment. By agreeing to a commercial lease, the lessee promises they won't vacate the premises while it's still in effect. This ensures that the tenant won't utilize the property for anything not specified in the lease, as well.
  • Flood Disclosure. In this section of the rental contract, the landlord must state whether the property is prone to flooding and whether there have been three or more floods in the last five years.
  • Lead-based Paint Disclosure. Before 1978, lead was often used in paint. According to federal law, if a building was constructed during this time, the landlord is required to tell prospective tenants about this potential hazard.

Free Templates

If you're looking for an easy way to draw up a Georgia commercial lease agreement, a great place to start is with a free form. At DoorLoop, we have a Georgia lease agreement template in Word or PDF version that you can download and edit. We also have an intuitive editor tool that you can use to customize your lease agreement.

Suppose you're looking for an innovative platform that allows you to manage listings, receive payments, do your accounting, and manage lease agreements. In that case, DoorLoop is the perfect solution for your real estate business. Book a free demo to experience our software for yourself!

Final Thoughts

The truth is that drawing up a lease agreement can be a stressful task. There are so many details to include, and creating one from scratch can be time-consuming. Fortunately, you can use our lease agreement tool to create custom lease agreements in just minutes!

With a smart autofill feature, professional forms and templates, and a host of other features that you can enjoy, DoorLoop is the ultimate solution for rental business owners in Georgia! To find out more, contact us today!

FAQs

Can a landlord lock a tenant out of a commercial property?

Yes. According to state law, a landlord can lock a tenant out of rented commercial space for unpaid rent. Residential tenants are treated differently, and a landlord might need a court order before evicting them. However, a commercial tenant's rights to the property differ from those of a residential tenant. A landlord may also sell the assets of their commercial tenant to make up for unpaid rent.

Does Georgia have a government agency that handles landlord-tenant disputes?

There is no official organization in Georgia with authority to arbitrate disputes between landlords and tenants or compel parties to act in a certain way. A commercial tenant will have to use the courts, either independently or via an attorney, to pursue their legal rights if they are unable to settle a disagreement with a landlord on their own.

Does a commercial lease agreement have to be notarized to be legally binding?

No, a lease agreement does not have to be notarized in Georgia to be considered legally binding. The document only comes into effect once both parties have signed it.

Can people live in a commercial building in Georgia?

Yes, some commercial buildings are fit for live-in tenants. However, residing there will not be legal unless the structure is formally given residential status. Commercial buildings, such as old urban warehouses, for example, make particularly attractive residential conversion projects.

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David Bitton

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!