COMMERCIAL LEASE AGREEMENT
(Alaska – Professionally Drafted Template)
[// GUIDANCE: This template is drafted for use with commercial real property located in the State of Alaska. It incorporates Alaska-specific eviction procedures, assignment/subletting rules, and environmental compliance obligations. All bracketed items must be customized before execution.]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
1. Demise, Premises, and Term
2. Rent and Additional Charges
3. Use and Exclusive Purpose
4. Taxes, Utilities, and Operating Expenses
5. Tenant Improvements and Alterations
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
I. DOCUMENT HEADER
THIS COMMERCIAL LEASE AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
- [LANDLORD LEGAL NAME], a [STATE] [corporation/limited liability company/partnership/other] (“Landlord”); and
- [TENANT LEGAL NAME], a [STATE] [corporation/limited liability company/partnership/other] (“Tenant”).
Landlord and Tenant are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
Recitals
A. Landlord is the fee simple owner of that certain real property commonly known as “[PROPERTY NAME/SHOPPING CENTER/OFFICE BUILDING]” located at [STREET ADDRESS], [CITY], Alaska (the “Property”).
B. Tenant desires to lease from Landlord, and Landlord desires to lease to Tenant, a portion of the Property upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
II. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. Capitalized terms used but not defined in context shall have the meanings assigned here.
“ADA” means the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq., and its implementing regulations.
“Additional Rent” has the meaning given in Section III.2(b).
“Base Rent” means the fixed monthly rent payable under Section III.2(a).
“Business Days” means any day other than Saturday, Sunday, or an Alaska state or federal holiday.
“Commencement Date” has the meaning set forth in Section III.1(b).
“Environmental Laws” means all federal, state, and local laws (including, without limitation, CERCLA, 42 U.S.C. §§ 9601 et seq.) relating to protection of the environment, human health, or natural resources.
“Event of Default” has the meaning specified in Section VI.1.
“Hazardous Material” means any substance regulated or defined as hazardous, toxic, polluting, or otherwise restricted under Environmental Laws.
“Lease Year” means each consecutive twelve (12)-month period beginning on the Commencement Date.
“Permitted Use” has the meaning set forth in Section III.3(a).
“Premises” means the leasable space depicted on Exhibit A and containing approximately [__] rentable square feet.
“Security Deposit” means the amount specified in Section III.2(d).
[// GUIDANCE: Add or delete definitions as required for the particular transaction.]
III. OPERATIVE PROVISIONS
1. Demise, Premises, and Term
(a) Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, together with the non-exclusive right to use the Common Areas (as defined in Exhibit B).
(b) Term. The term of this Lease (the “Term”) shall commence on the earlier of (i) the date Tenant opens for business in the Premises or (ii) [DATE CERTAIN] (the “Commencement Date”), and shall expire at 11:59 p.m. Alaska Time on the last day of the [_] (__) Lease Year (the “Expiration Date”), unless sooner terminated in accordance with this Agreement.
(c) Option(s) to Extend. Tenant shall have [] option(s) to extend the Term for additional periods of [] years each ([collectively], the “Extension Term(s)”) upon written notice to Landlord at least [_____] days prior to the then-current Expiration Date, subject to (i) no uncured Event of Default and (ii) agreement on Market Rent per Section III.2(c).
2. Rent and Additional Charges
(a) Base Rent. Commencing on the Commencement Date, Tenant shall pay to Landlord monthly base rent (“Base Rent”) in the following amounts:
Lease Year 1: $[_] per rentable sq. ft. = $[] / month
Lease Year 2: $[__] per rentable sq. ft. = $[_____] / month
[insert schedule through full Term]
(b) Additional Rent. In addition to Base Rent, Tenant shall pay:
(i) Tenant’s proportionate share of Operating Expenses (defined in Exhibit C);
(ii) all utilities per Section III.4(b); and
(iii) all other amounts payable by Tenant hereunder, collectively with Base Rent, “Rent.”
(c) Rent Adjustments. Base Rent for each Extension Term shall be (i) [__]% above the preceding Lease Year, or (ii) Fair Market Rental as mutually agreed (and absent agreement, determined by appraisal).
(d) Security Deposit. Upon execution, Tenant shall deliver to Landlord a security deposit in the amount of $[__] (the “Security Deposit”) as security for Tenant’s performance. Landlord may apply the Security Deposit to cure any Tenant default; Tenant shall replenish within ten (10) Business Days of written demand.
(e) Payment Mechanics. Rent shall be due and payable without offset or deduction on or before the first (1st) day of each calendar month in lawful money of the United States at Landlord’s address for payment, or by ACH per Landlord’s written instructions.
(f) Late Charge; Interest. If Tenant fails to pay any installment of Rent within five (5) days after due, Tenant shall pay (i) a late charge equal to five percent (5%) of the overdue amount, and (ii) interest at the lesser of ten percent (10%) per annum or the maximum rate permitted by law from the due date until paid.
3. Use and Exclusive Purpose
(a) Permitted Use. Tenant shall use the Premises solely for [DESCRIBE BUSINESS USE] and for no other purpose without Landlord’s prior written consent.
(b) Prohibited Uses. Tenant shall not (i) violate any recorded covenants, conditions, or restrictions; (ii) create nuisance; (iii) generate excessive noise or odor; or (iv) use the Premises for any purpose disallowed by applicable zoning.
(c) Compliance with Laws. Tenant shall, at Tenant’s sole cost, comply with all federal, state (including Alaska fire, building, and Environmental Laws), and local laws, ordinances, and regulations applicable to the Premises or Tenant’s use thereof.
4. Taxes, Utilities, and Operating Expenses
(a) Real Estate Taxes. Landlord shall pay all real estate taxes for the Property; Tenant shall reimburse Landlord monthly, as Additional Rent, for Tenant’s proportionate share.
(b) Utilities. Tenant shall pay directly to the utility provider (or reimburse Landlord if billed to Landlord) for all electricity, water, gas, sewer, telecommunications, trash removal, and other services supplied to the Premises.
(c) Operating Expenses. Tenant shall pay its proportionate share of Operating Expenses as set forth in Exhibit C, including but not limited to maintenance, insurance, snow removal, and property management fees.
5. Tenant Improvements and Alterations
(a) Initial Build-Out. Landlord [shall/shall not] deliver a tenant improvement allowance of $[_____] (“TI Allowance”). Any work exceeding the TI Allowance shall be at Tenant’s sole cost.
(b) Alterations. Tenant shall not make any alterations, additions, or improvements (“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld as to non-structural Alterations costing less than $[__]. Alterations shall be performed in a good and workmanlike manner, lien-free, and in compliance with laws.
(c) Removal and Restoration. At Lease expiration or earlier termination, Tenant shall remove all trade fixtures and personal property and restore any damage. Landlord may require removal of Alterations unless Landlord elects in writing to accept them.
IV. REPRESENTATIONS & WARRANTIES
4.1 Mutual Representations. Each Party represents and warrants to the other that:
(a) it is duly organized, validly existing, and in good standing in its jurisdiction of formation;
(b) it has full power and authority to execute and deliver this Agreement and perform its obligations;
(c) the individual signing this Agreement on its behalf is duly authorized; and
(d) this Agreement constitutes its legal, valid, and binding obligation, enforceable in accordance with its terms.
4.2 Landlord Representations. Landlord further represents that:
(a) it holds good and marketable fee title to the Property, free of monetary liens other than Permitted Encumbrances (defined in Exhibit D); and
(b) the Premises currently comply with all applicable building codes and Environmental Laws to Landlord’s knowledge.
4.3 Tenant Representations. Tenant further represents that:
(a) its intended use is permitted under applicable zoning;
(b) it has obtained, or will obtain prior to occupancy, all licenses and permits required for its business; and
(c) no petition in bankruptcy has been filed by or against Tenant or any guarantor within the past seven (7) years.
[// GUIDANCE: Consider attaching disclosure schedules if any representation requires qualification.]
V. COVENANTS & RESTRICTIONS
5.1 Affirmative Covenants of Tenant. Tenant shall:
(a) keep the Premises in neat, sanitary, and safe condition;
(b) promptly remove all snow and ice from any exclusive-use entrances;
(c) maintain insurance per Section VII.3;
(d) provide access for Landlord to inspect and perform maintenance upon reasonable notice; and
(e) comply with Environmental Laws and promptly remediate any violation caused by Tenant.
5.2 Negative Covenants of Tenant. Tenant shall not:
(a) assign this Lease or sublet any portion of the Premises except in strict compliance with Section 5.3;
(b) install any exterior signage without Landlord’s prior written approval;
(c) permit any lien to attach to the Property; or
(d) use any Hazardous Material except customary cleaning supplies used in compliance with manufacturer instructions.
5.3 Assignment & Subletting (Alaska-Specific).
(a) Consent Requirement. Tenant shall not assign, transfer, mortgage, pledge, or encumber this Lease, nor sublet all or any part of the Premises, without Landlord’s prior written consent, which may be withheld in Landlord’s reasonable discretion.
(b) Conditions for Approval. Landlord may condition approval on, among other things, (i) reasonable creditworthiness standards, (ii) use compatibility, (iii) execution of a direct assumption agreement, and (iv) reimbursement of Landlord’s review costs (capped at $[_____]).
(c) Recapture Right. Landlord may, within fifteen (15) days of Tenant’s request for consent, elect to recapture the space proposed for assignment or subletting, whereupon the Term for such space shall terminate and Rent shall be proportionally abated.
(d) Permitted Transfers. Notwithstanding the foregoing, Tenant may assign this Lease without Landlord’s consent to (i) a successor by merger or consolidation, or (ii) an affiliate controlling, controlled by, or under common control with Tenant, provided net worth is not diminished.
[// GUIDANCE: Alaska law does not impose mandatory “reasonableness” constraints on commercial lease assignment clauses, allowing the above discretion.]
5.4 Environmental Compliance.
(a) Tenant Obligations. Tenant shall not cause or permit the release of any Hazardous Material at, on, under, or about the Premises. Tenant shall immediately notify Landlord in writing of any actual or threatened release and shall remediate at its sole cost.
(b) Environmental Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord and its affiliates from any and all claims, costs, fines, and liabilities arising out of Tenant’s breach of this Section or the presence of Hazardous Material introduced by Tenant.
(c) Landlord Right of Inspection. Landlord may conduct environmental audits annually upon five (5) Business Days’ notice, at Landlord’s cost unless contamination is discovered, in which case Tenant shall reimburse Landlord.
VI. DEFAULT & REMEDIES
6.1 Events of Default. Each of the following constitutes an “Event of Default” if not cured within any applicable notice and cure period:
(a) failure to pay Rent within five (5) days after written notice (provided, no notice is required more than twice in any 12-month period);
(b) failure to perform any non-monetary obligation within thirty (30) days after written notice (or such longer period as reasonably required if cure is commenced and diligently pursued);
(c) abandonment or vacation of the Premises;
(d) assignment, subletting, or transfer in violation of Section 5.3;
(e) bankruptcy, insolvency, appointment of a receiver, or similar proceeding; or
(f) breach of any representation or warranty that materially and adversely affects Landlord.
6.2 Landlord Remedies. Upon an Event of Default, Landlord may, at its option and in addition to any other rights provided herein or at law:
(a) Terminate Lease and recover possession in accordance with Alaska’s forcible entry and detainer statutes (Alaska Stat. §§ 09.45.060-.160);
(b) Re-Enter and Re-Let the Premises, with Tenant liable for the difference between Rent reserved and rent received, plus reletting costs;
(c) Accelerate Rent for the balance of the Term, discounted to present value at six percent (6%) per annum;
(d) Landlord’s Self-Help Right to perform Tenant’s obligations and charge Tenant all reasonable costs plus ten percent (10%) administrative fee;
(e) Injunctive Relief / Specific Performance to prevent ongoing violations;
(f) Lien on Tenant Property as security for unpaid Rent under Alaska Stat. § 34.35.070; and
(g) Attorney Fees and Costs per Section VI.4.
6.3 Tenant Remedies. If Landlord fails to perform any covenant and such failure continues for more than thirty (30) days after Tenant’s written notice (or longer if cure is diligently pursued), Tenant may (i) perform the obligation and offset the reasonable cost against Rent (not to exceed two (2) months’ Base Rent in any Lease Year), or (ii) seek specific performance or damages, but in no event shall Landlord be liable for consequential damages.
6.4 Attorneys’ Fees. In any action or proceeding arising under this Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees and costs, including fees incurred in post-judgment collection, appeal, bankruptcy, or arbitration.
VII. RISK ALLOCATION
1. Indemnification
(a) Tenant Use Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord, its partners, affiliates, and agents (“Landlord Indemnitees”) from and against any and all claims, causes of action, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising from (i) Tenant’s use or occupancy of the Premises or Property; (ii) the conduct of Tenant’s business; (iii) any act, omission, or negligence of Tenant, its employees, contractors, or invitees; or (iv) any breach of this Agreement by Tenant, except to the extent caused by the gross negligence or willful misconduct of a Landlord Indemnitee.
(b) Landlord Indemnity. Landlord shall indemnify, defend, and hold Tenant harmless from claims arising out of Landlord’s gross negligence or willful misconduct.
2. Limitation of Liability
EXCEPT FOR (i) A PARTY’S INDEMNITY OBLIGATIONS, (ii) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (iii) CLAIMS THAT CANNOT BE LEGALLY LIMITED, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES. Landlord’s aggregate liability shall not exceed $[CAP AMOUNT] in any Lease Year. [// GUIDANCE: Adjust liability cap or remove if unacceptable to either Party.]
3. Insurance
(a) Tenant Insurance. Tenant shall maintain, at its sole cost:
(i) Commercial General Liability insurance with limits of not less than $[1,000,000] per occurrence and $[2,000,000] aggregate;
(ii) Workers’ Compensation as required by Alaska law;
(iii) Commercial Property insurance on a “special form” basis covering Tenant’s personal property and improvements; and
(iv) Environmental liability insurance if Tenant handles Hazardous Materials.
(b) Landlord Insurance. Landlord shall maintain property insurance covering the Building and commercial general liability insurance with limits customary for similar properties.
(c) Certificates. Each Party shall provide certificates of insurance naming the other as additional insured (CGL) or loss payee (property) prior to occupancy.
4. Force Majeure
Neither Party shall be liable for failure to perform (other than Rent payments) due to acts of God, fire, flood, epidemic, war, terrorism, labor disputes, government orders, or other events beyond its reasonable control; provided, the affected Party gives notice within ten (10) Business Days and resumes performance promptly thereafter.
VIII. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Alaska, without regard to conflicts-of-law principles.
8.2 Forum Selection. Subject to Section 8.3, any suit arising out of or relating to this Agreement shall be brought exclusively in the state courts located in the [JUDICIAL DISTRICT], Alaska, and the Parties submit to the jurisdiction thereof.
8.3 Optional Arbitration. [CHECK ONE:]
☐ Arbitration Not Selected
☐ Arbitration Selected – Any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, held in [CITY], Alaska. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver. [OPTIONAL — SELECT IF DESIRED:]
EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
8.5 Preservation of Injunctive Relief. Notwithstanding the foregoing, Landlord may seek immediate injunctive relief (including eviction, specific performance, or unlawful detainer) in accordance with Alaska Stat. §§ 09.45.060-.160.
IX. GENERAL PROVISIONS
9.1 Amendments and Waivers. No amendment or waiver shall be effective unless in writing signed by the Party against whom enforcement is sought; a waiver on one occasion shall not operate as a waiver on any other.
9.2 Successors and Assigns. Subject to Section 5.3, this Agreement binds and benefits the Parties and their respective successors and permitted assigns.
9.3 Severability. If any provision is held invalid or unenforceable, the remaining provisions remain in full force, and the invalid portion shall be reformed to the minimum extent necessary.
9.4 Entire Agreement. This Agreement, together with all exhibits and addenda, constitutes the entire agreement between the Parties and supersedes all prior understandings.
9.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including PDF and electronic signatures), each of which is deemed an original and all of which together constitute one instrument within the meaning of the federal E-SIGN Act.
9.6 Notices. All notices shall be in writing and deemed given (i) upon personal delivery, (ii) one Business Day after deposit with a recognized overnight courier, or (iii) three Business Days after deposit in U.S. certified mail, return receipt requested, postage prepaid, addressed as follows (or as a Party may later designate by notice):
Landlord:
[Name & Address]
Attn: [__]
Tenant:
[Name & Address]
Attn: [__]
Email notices are courtesy only and do not constitute effective notice unless receipt is acknowledged.
9.7 No Recordation. Tenant shall not record this Agreement or any memorandum without Landlord’s written consent; any unauthorized recording shall constitute an Event of Default.
9.8 OFAC Compliance. Each Party represents that it is not listed on, nor owned or controlled by any person on, any OFAC list.
X. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Commercial Lease Agreement as of the Effective Date.
LANDLORD:
[LANDLORD LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
TENANT:
[TENANT LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
[OPTIONAL NOTARY BLOCK – Alaska allows recording of memoranda; notarization is recommended if a short-form memorandum will be recorded.]
EXHIBIT A – Premises Floor Plan
EXHIBIT B – Common Areas Description & Rules
EXHIBIT C – Operating Expense Definitions
EXHIBIT D – Permitted Encumbrances
[// GUIDANCE: Attach additional exhibits as needed (e.g., Work Letter, Guaranty, Memorandum of Lease). Review all placeholders and Alaska-specific statutory references before finalization.]