A commercial lease contract is a legal document that stipulates the terms and conditions of leasing a business premises. Unlike a residential lease between a landlord and a tenant, leasing commercial property involves a landlord and a business.
Having a written contract is essential when entering into an agreement with a tenant. Moreover, the two parties must be on the same page and accept the terms. If you need help drawing up a rental agreement for retail, office, or industrial space in North Carolina, here are a few tips to help you create your next commercial lease agreement.
Commercial Lease Agreements
A North Carolina commercial lease contract is a legally binding document that specifies the terms of the lease of an office, warehouse, industrial, or retail space and the obligations of the parties involved. It outlines the relationship between a tenant and a landlord.
As opposed to residential lease agreements that are generally valid for up to two years, commercial leases have a much longer term, which may exceed 10 years. This is why paying special attention when creating your rental contract is important.
North Carolina Leases
If you're wondering what you will need to include in your lease, here are some essential elements that you should have in this document:
- Personal and Property Details. According to North Carolina law, commercial rental contracts must have the names and addresses of the owner(s) of the tenant's business in the introduction. It must also contain information about the landlord and anyone who is authorized to act on his or her behalf. This includes managers and realtors. Moreover, the address of the commercial property must be clearly stated, along with a detailed description of the space.
- Lease Term and Rent Amount. It is also essential to specify the start and end date of the lease agreement. You will need to mention the monthly rental amount the tenant will have to pay when it is due and any penalties that may apply for late payment in this section of the lease.
- Renovations. Commercial businesses could require remodeling, more signage, and growth throughout a tenancy. Because of this, a commercial lease must contain comprehensive guidelines on business and landlord obligations.
- Repairs and maintenance. In this section, you will need to specify who is responsible for certain maintenance and repairs. This will also include the maintenance of parking areas.
- Renewals and modifications. If either party needs to make amendments to the lease, both parties must consent to these changes. You will need to include a section to specify this in your lease.
- Utilities. Determining who pays the utilities is much simpler if you lease a single-tenant facility. However, when you have a multi-tenant property, it is important to specify what portion of the utilities the tenant will have to pay for.
Once you have added these sections, you must have a space for both parties to print their names, sign, and date the document to express their consent to its terms.
According to state and federal law, landlords in North Carolina are required to disclose the following information in their commercial lease agreements:
- Security Deposit. According to North Carolina law, landlords are required to provide tenants with certain information, including the address and name of the bank where the security deposit is held, in the written agreement.
- Lead-based Paint Disclosure. Federal law requires all landlords with properties built before 1978 to include this disclosure to inform tenants of the potential hazards of exposure to this substance.
- Lease Default. The parties to a commercial lease are in default if the enterprise is not open during regular business hours, engages in illegal activity on the property, maintains the space poorly, disposes of waste incorrectly, or declares bankruptcy.
If you want to create your own commercial rental contract, you have a few options. You could use our editable North Carolina commercial lease agreement form. We have PDF and Word versions that you can customize.
Alternatively, you can choose our smart lease agreement generator if you prefer the freedom to create more detailed, personalized lease agreements. You can make comprehensive contracts with this tool in no time! The DoorLoop platform also allows you to advertise properties, receive monthly rent, and manage your rental business. Book a free demo today to experience DoorLoop for yourself!
If you're creating a commercial rental agreement for the first time, we understand that you may find the process daunting, which is why we have developed a smart tool to help you create the perfect commercial lease agreements quickly and easily!
Book a demo today to experience DoorLoop for yourself! Are you looking for a residential rental agreement instead? Please browse our list of free templates and guides for more information!
Do business leases need to be notarized in North Carolina?
No, leases don't have to be notarized to be legally binding in North Carolina. However, many prefer this.
What are landlords not allowed to do?
Except when conducting routine maintenance, renovations, and repairs, landlords are not permitted to remove doors, shut off utilities, or disrupt normal business operations.
What are the different types of North Carolina commercial lease agreements?
There are various possible lease options, and before making your choice, you will need to consider the pros and cons of each one. Companies can sign a gross lease if their only goal is to pay the monthly rent. The landlord will use the rental amount to cover all additional expenses, such as insurance, property taxes, and maintenance.
A triple-net lease is the best option if a tenant wants to have more control over the property and will be responsible for paying insurance costs and property tax. Newly established companies, only the other hand, may prefer a modified gross lease, which pays the landlord a portion of the company's income to cover these expenses.