Contents

Commercial leases in Indiana are written agreements between a business owner (tenant) and landlord. This type is used to rent a commercial property, including warehouses, retail stores, and office spaces. Generally, the contract is more complicated and longer than residential versions.

Overall, it's a legally binding contract between the tenant who wants to rent that commercial property to operate a business and the landlord who owns it.

They are often more detailed because they last longer than their residential counterparts and must cover more situations. Therefore, it's critical for the tenant and the landlord to establish strict rules about each aspect of the tenancy. It could last for years or decades.

Sometimes, the lease requires fluidity since the tenant may wish to upgrade the commercial property later.

Specific terms should be outlined, so the parties are satisfied for the rental period. The landlord's goal is to create an ironclad lease, which requires some work and knowledge.

Before learning how to write it, let's focus on the types of leases available in this state:

  • Triple Net Lease - The tenant must shoulder the rent payments, insurance, property taxes, and maintenance fees for the property.
  • Percentage Lease - The arrangement of how much the tenant pays is based on how profitable the business is. It's primarily used in retail, where the tenant gives a percentage of their gross profits from sales, which is on top of the minimum base rent.
  • Gross Lease - The commercial tenant is primarily responsible for rent but not maintenance, taxes, or insurance. Rent is often higher than market value to offset the cost to the landlord.
  • Modified Gross Lease - This option is a hybrid format. Overall, the tenant pays rent, but the landlord and tenant share the operating expenses, which is agreed upon in the lease.

What to Include

When crafting commercial leases, it's best to include these sections:

  • Party and Property Information - The beginning of your document should list the parties involved in the lease to affirm legality. Include the full names of the tenant and landlord, as well as the tenant's business name. If a management company is also involved, include that. Finally, add the property address with the unit number, back streets, county, and Zip code.
  • Utilities - Utilities tend to fall outside of your lease type, so it's crucial to outline the responsibilities for landlords and tenants. Typical utilities include water, telephone, gas, sewage, and electricity. Some commercial properties have singular services, so the landlord might pay them, invoicing the cost to every tenant. However, the breakdown must be clearly stated for the percentage to the tenant. If a landlord chooses to personally cover a utility, it must be noted.
  • Lease Term Information - Obviously, you should include the rental payment amount, the date it's due, and what happens when that doesn't happen.
  • Security Deposit - The landlord is allowed to request a security deposit, and they can choose whatever amount they want. However, it's best not to go over a few months' rent.
  • Signatures - This is a business agreement between the landlord and tenant, so the final document must have the signature of each person. Make sure everyone prints their full names with the date it was signed.

Required Disclosures

There are a few disclosures to follow for residential or commercial leases in Indiana. These include:

  • Lead Paid Disclosure - Federal law indicates that properties built before 1978 require the landlord to disclose if lead-based paint is used on the premises. It's highly dangerous to pregnant women and children. Overall, the landlord should provide the disclosure form, which is signed and initialed by the tenant (business owner).
  • Managers and Agents - If someone represents the landlord, their names have to be disclosed if they might enter the premises with appropriate notice. You should also provide the address for notices or repairs.
  • Access - Indiana state law states that landlords and agents must give oral or written notice before entering the premises. It's illegal for those parties to come onto the property for a non-emergency situation.

Here are a few additional lease considerations to include. They're not required by law, but they're still important:

  • Storage - To keep everyone safe, the lease must prohibit storing dangerous materials. These include items that are illegal, explosive, flammable, or otherwise hazardous. The agreement must also add that selling those are prohibited.
  • Rules for Subleasing - Some business owners choose to add a sublease business. Indiana allows them if they're not forbidden by the original lease. It's crucial to outline those parts clearly in the document.
  • Property Improvements - Businesses might undergo changes to keep up with the industry. Enhancements might be extensive, so it's wise that the lease state what's acceptable when adding signage or upgrading the premises.

Building Your Own

Typically, online templates are pretty generic and don't let you customize the details for your agreement. Your goal is to stay organized and draft something that fits your needs.

We recommend downloading a DoorLoop document in PDF or Word format. It's easy to do; DoorLoop lets you make changes to meet your requirements.

DoorLoop has property management software that lets the landlord allow tenants to eSign documents and pay rent online. You can also reuse templates, auto-filling your information.

The software even lets you market your properties on different websites, and you do away with paper applications. Tenants can fill everything out online, and you can run appropriate background checks with ease.

Conclusion

It's difficult to create a legally-binding contract, and most people feel that they must hire a rental attorney to get the job done. However, this guide explained the main points to include in your commercial lease agreement.

Create a document quickly that meets all of your needs to avoid issues later.

We recommend that you download the template and customize it. DoorLoop lets you fill in the appropriate information, such as expenses. Once you've done that, sign it, let the tenant sign, and you have finished the process!

DoorLoop can help you craft lease agreements that meet Indiana standards. Plus, it offers property management software so that you stay on track and get organized effortlessly.

There's no need to spend more on legal fees to ensure the provisions are correct. Landlords rejoice because their leases are perfect, legal, and ready to go.

Give DoorLoop a try today to see how it's different than other online tools. You'll be happy you did!

FAQs

Do Commercial Leases Have to Be Notarized in Indiana?

No, the commercial lease doesn't have to be notarized in Indiana for it to be valid. However, the landlord or tenant may request this. It's often best to do so because it protects both parties and costs less than you think to obtain it.

Does the Tenant Pay Building Insurance?

The tenant doesn't always pay the insurance on a building. It depends on how the lease is worded and its type. Generally, the landlord wants the tenant to do so because it's less money coming out of their pocket.

Why Do You Have to Include the Required Disclosures?

Every state requires the lead-paint disclosure because federal law demands it. However, Indiana has laws about access to protect tenants. That means the landlord or property manager must give notice before they can enter.

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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!