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A Maryland commercial lease agreement is a legally-binding contract that lists the conditions and terms associated with renting the commercial property. The document establishes a working relationship between the tenant (business) and the landlord. Because it costs a lot, the rental lease document is often longer than a residential version.

When someone owns a business and wants to lease a property, they require a lease agreement that fits their business needs. There are various options available, and they all have pros and cons for each party.

You learn about them in this article and can also create your own leases based on your needs. Generally, they last 10 years or more, which means you don't have to do a lot of work every year. This is ideal for landlords who want passive income without the hassles.

What to Include

As with other leases, your Maryland commercial lease agreement must include certain things. Here are a few of the most important sections:

  • Property and Party Information - You must list the full name of both parties and the management company. Here, the company name is also included, as well as a contact number. Provide data on the commercial property itself, such as identifying points and a full mailing address. If there's a particular floor or unit number, offer that.
  • Terms - The terms are the most important part of the commercial lease. You should include the monthly rent amount the tenant pays, rules to follow, and whether or not the tenant can sublease. Include a lease term (start/end date), as well. Overall, the lease term dictates how long a company has at that property. Clearly, you can renegotiate a new lease term as necessary.
  • Security Deposit - If you request a security deposit, list the amount. You should also provide information about when the security deposit can be returned and what it might be used for if there are issues. Tenants have rights; if you unreasonably withheld the deposit, you could be sued.
  • Insurance Information - Your rental agreement must also include data on insurance. Generally, comprehensive general liability insurance is necessary, but it could be the tenant or landlord who pays. If it's the landlord, make sure to list the insurance company used.
  • Signature Section - The final section of your agreement is for the signatures of all parties involved. Landlords and tenants must print and sign their names, dating the document, too.

There might be other information you should include, such as:

  • Who handles property maintenance after giving written notice
  • When landlords can enter the building
  • Who pays utilities
  • Signage information
  • Parking data
  • Property damage or destruction and who's responsible
  • What to do if there are insufficient funds after tenant pays rent
  • The due date of rent due

Maryland commercial lease agreements

Every commercial lease agreement is unique so that it can be more stable for tenants who require more flexibility. Here are a few of the options available:

Percentage Lease

This rental agreement takes into account how well the company does. If it's not going well, the tenant pays lower monthly payments on the commercial property. When it's thriving, they give the landlord a percentage of the earnings. This is a safer choice for startups.

Triple Net Lease

A triple net lease is suitable for many businesses because the renter has more freedom. In a sense, the tenant pays rent and some of the expenses for running the commercial property. Therefore, they are sure to have insurance, cover personal property taxes, and more. However, the business owner feels more in control.

Gross Lease

A gross lease often benefits the tenant since they must pay the rent owed each month. The expenses related to the property are paid, but taxes and insurance are covered by a landlord.

Typically, the landlord can increase the rent amount required by the tenant with a gross lease agreement, as long as it's not crippling to the business.

Modified Gross Lease

Sometimes, a tenant and landlord don't want to go with traditional options, and a modified gross lease benefits both parties. With this commercial lease agreement, each person must agree on the monthly payments and who covers what before signing the lease.

Required Disclosures

Your commercial lease agreement must disclose certain information for it to be legal. Therefore, you should either provide the tenant with this data or include it in the rental lease document. The disclosures include:

  • Lead-based Paint - Federal law states that all property owners say whether a unit has lead-based paint, regardless of the state.

Maryland only requires this disclosure to have a legal contract.

Build Your Own

There are plenty of templates available online, but they're often generic and don't allow you to include the details you prefer in your commercial lease agreement. However, you can still create your own free form to use over and over.

You want to keep your leases efficient and organized. We recommend that you download a Maryland commercial lease template in Word or PDF format. It's so easy because DoorLoop allows you to customize the document to meet all of your needs.

Do you want to let tenants eSign the document after it's created, or do you prefer to build a tenant portal to pay rent online? DoorLoop also offers property management software for managers and landlords. Turn your forms into reusable templates, auto-filling the information, and send through email.

The software also helps you market properties on various websites. Plus, you don't have to deal with paper applications. Tenants can fill them out online, you can run background checks from the software, and much more!

Conclusion

Drafting a legally-binding contract seems challenging initially. However, this guide helps you go through all the main points and ensure that things are done correctly. When you're finished, you've got a document that everyone agrees on, avoiding problems later on.

It's best to download the free form template from DoorLoop and customize it. You can fill in your information, including rent, expenses, and everything else. Then, sign it, have the tenant do so, and you're ready to go.

If you require a Maryland commercial lease agreement, DoorLoop has you covered. Plus, you can use the property management software to keep everything organized and on track. It's so easy to use!

FAQs

Does Maryland Require Commercial Leases to Be Notarized?

No, the commercial lease agreement doesn't have to be notarized in Maryland. Still, one or both parties might like to do this to protect themselves and everyone involved. If you do choose to notarize the lease, any additions or changes made must then be notarized for it to be legal.

Is Maryland Friendly to Landlords?

Yes, Maryland is considered to be a landlord-friendly state. Generally, monthly rent payments are higher than normal. Plus, Maryland doesn't enforce any rent control policies and has few disclosures required. Therefore, you can create a commercial lease that works in your favor.

What Are the Landlord/Tenant Laws in Maryland?

Both parties must enter into an agreement that lasts longer than traditional residential leases. Generally, they span five to 10 years.

There are also variable lease breakdowns and lease options. Sometimes, the tenant and landlord are responsible for running expenses. For example, a triple net lease requires that the tenant pays rent and business expenses.

The only required disclosure in Maryland is the lead-based paint one because federal law demands it. This is valid for all properties built before 1978. Tenants know that lead paint is harmful to pregnant women and children and if it was used at some point within the building.

Your commercial lease must also tell the tenant if modifications are allowed on the property. That includes larger signs, renovations, and add-ons related to the business.

A commercial lease document must be signed with all names printed on it.

Are Month-to-Month Leases Valid in Maryland?

They are valid for residential leases but not commercial ones. It's generally too difficult to know who handles what payments without a lease, and it's challenging to work on a month-to-month basis. Overall, commercial leases are often five to 10 years long, which saves time, money, and effort.

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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!