COMMERCIAL LEASE AGREEMENT
(Colorado)
[// GUIDANCE: This template is drafted for use with commercial real property located in the State of Colorado and is intended for review and customization by licensed counsel. Bracketed variables must be completed or deleted before execution.]
TABLE OF CONTENTS
- Lease Summary
- Definitions
- Premises; Term; Possession
- Rent; Additional Rent; Security Deposit
- Representations and Warranties
- Covenants and Restrictions
- Maintenance, Repairs, and Alterations
- Environmental Matters
- Insurance
- Assignment and Subletting
- Events of Default and Remedies
- Risk Allocation
- Casualty; Condemnation; Force Majeure
- Dispute Resolution
- Notices
- General Provisions
- Execution Block
1. LEASE SUMMARY
[// GUIDANCE: Insert concise, non-binding business terms here for quick reference.]
• Landlord: [LANDLORD LEGAL NAME], a [STATE] [ENTITY TYPE]
• Tenant: [TENANT LEGAL NAME], a [STATE] [ENTITY TYPE]
• Premises: [ADDRESS / LEGAL DESCRIPTION / SUITE NO.]
• Building / Project: [NAME OR “N/A”]
• Rentable Area: [] rentable square feet (“RSF”)
• Initial Term: [] years, commencing on [COMMENCEMENT DATE] (“Commencement Date”) and expiring on [EXPIRATION DATE] (“Expiration Date”)
• Base Rent: $[] per RSF per annum, payable in equal monthly installments of $[] (“Base Rent”)
• Security Deposit: $[___]
• Permitted Use: [DESCRIBE]
• Guarantor(s): [IF ANY]
• Brokers: [NAMES OR “NONE”]
2. DEFINITIONS
For purposes of this Lease, capitalized terms have the meanings set forth below or as otherwise defined herein.
2.1 “Additional Rent” – Any monetary obligation other than Base Rent due under this Lease.
2.2 “Affiliate” – Any entity that, directly or indirectly, controls, is controlled by, or is under common control with the referenced party.
2.3 “Building” – The building in which the Premises are located, as more particularly described in Exhibit A.
2.4 “Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law duties relating to pollution or protection of human health or the environment, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; and the Colorado Hazardous Waste Act, C.R.S. § 25-15-101 et seq.
2.5 “Event of Default” – Any event set forth in Article 11.
2.6 “Federal Bankruptcy Code” – Title 11 of the United States Code, 11 U.S.C. § 101 et seq.
2.7 “Lease Year” – Each consecutive 12-month period beginning on the Commencement Date (or anniversary thereof) unless otherwise specified.
2.8 “Operating Expenses” – All costs and expenses incurred by Landlord in owning, operating, repairing, replacing, managing, and maintaining the Building and the Project, as more fully described in Section 4.3.
2.9 “Project” – The parcel(s) of real property described in Exhibit A, together with the Building and all appurtenances thereto.
2.10 “Rent” – Collectively, Base Rent and Additional Rent.
3. PREMISES; TERM; POSSESSION
3.1 Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises for the Term upon the terms and conditions set forth herein and in the exhibits attached hereto, which are incorporated by reference.
3.2 Term. The Term shall commence on the Commencement Date and continue until the Expiration Date, unless sooner terminated pursuant to this Lease.
3.3 Delivery; Acceptance.
(a) Landlord shall deliver the Premises “[AS-IS]” on the Commencement Date unless otherwise specified in a separate work letter attached hereto as Exhibit B.
(b) Tenant’s occupancy of the Premises shall constitute conclusive acceptance, subject only to latent defects of which Tenant gives Landlord written notice within thirty (30) days after Commencement.
3.4 Surrender. Upon expiration or earlier termination, Tenant shall surrender the Premises in the condition required by Section 7.4.
4. RENT; ADDITIONAL RENT; SECURITY DEPOSIT
4.1 Base Rent. Tenant shall pay Base Rent in advance on the first (1st) day of each calendar month during the Term, without set-off or deduction, at [PAYMENT ADDRESS] or by electronic funds transfer pursuant to Landlord’s instructions.
4.2 Late Charge; Interest. Any installment of Rent not received within five (5) days after due shall accrue a late charge equal to five percent (5%) of the overdue amount plus interest at the lesser of (i) twelve percent (12%) per annum or (ii) the highest rate permitted by applicable law.
4.3 Additional Rent – Operating Expenses. Tenant shall pay Tenant’s Proportionate Share ([___]%) of Operating Expenses monthly in advance, based on Landlord’s good-faith estimate, subject to annual reconciliation.
4.4 Taxes and Assessments. Tenant shall pay, as Additional Rent, (i) all taxes levied on Tenant’s personal property and trade fixtures and (ii) any business, sales, or rental tax arising from Tenant’s occupancy.
4.5 Security Deposit. Tenant shall deliver the Security Deposit upon execution. Landlord may commingle the Security Deposit with its general funds, shall have no obligation to pay interest, and may apply the Security Deposit to any default. Any unapplied balance shall be returned within thirty (30) days after Tenant’s surrender.
5. REPRESENTATIONS AND WARRANTIES
5.1 Mutual. Each party represents and warrants that:
(a) It is duly organized, validly existing, and in good standing under the laws of its state of formation and qualified to do business in Colorado;
(b) It has full power and authority to enter into and perform this Lease; and
(c) The individual executing this Lease on its behalf is duly authorized.
5.2 Landlord. Landlord represents that, to its actual knowledge and as of the Effective Date, the Premises are not subject to any governmental order requiring remediation of Hazardous Materials. Landlord makes no other representation or warranty, express or implied.
5.3 Survival. The representations and warranties in this Article 5 shall survive the execution and delivery of this Lease and any termination hereof for a period of twelve (12) months.
6. COVENANTS AND RESTRICTIONS
6.1 Affirmative Covenants of Tenant. Tenant shall:
(a) Use the Premises solely for the Permitted Use;
(b) Obtain and maintain all licenses, permits, and approvals required for such use;
(c) Comply with all applicable Laws (including Environmental Laws) and the Building Rules and Regulations (Exhibit C);
(d) Pay when due all Rent and other sums; and
(e) Maintain the Premises in a clean, safe, and sanitary condition.
6.2 Negative Covenants of Tenant. Without Landlord’s prior written consent, Tenant shall not:
(a) Use the Premises for any purpose other than the Permitted Use;
(b) Cause or permit any waste or nuisance;
(c) Store or handle Hazardous Materials except in compliance with Article 8;
(d) Alter the exterior of the Building or any structural element; or
(e) Overload the floors or building systems beyond their designed capacity.
6.3 Landlord’s Covenants. Landlord shall:
(a) Maintain and keep in good repair the structural elements of the Building and the common areas, subject to reimbursement as Operating Expenses;
(b) Provide standard utilities to the Premises; and
(c) Not unreasonably interfere with Tenant’s quiet enjoyment, so long as Tenant performs its obligations hereunder.
7. MAINTENANCE, REPAIRS, AND ALTERATIONS
7.1 Tenant’s Maintenance Obligations. Tenant, at its sole cost, shall maintain and repair the Premises (excluding structural elements and Building systems outside the Premises) in good order and condition, reasonable wear and tear and casualty excepted.
7.2 Landlord’s Maintenance Obligations. Landlord shall maintain in good order and repair (i) the Building’s roof, foundation, and structural elements; (ii) all Building systems servicing areas outside the Premises; and (iii) common areas. Costs shall be included in Operating Expenses except to the extent attributable to Landlord’s gross negligence or willful misconduct.
7.3 Alterations by Tenant. Tenant may not make any alterations, improvements, or installations (collectively “Alterations”) without Landlord’s prior written consent, which may not be unreasonably withheld, conditioned, or delayed with respect to non-structural Alterations. All Alterations shall comply with all Laws and shall, at Landlord’s election, become Landlord’s property upon installation.
7.4 Surrender Condition. On expiration or earlier termination, Tenant shall surrender the Premises broom-clean and free of Tenant’s personal property, trade fixtures, and Hazardous Materials, and with all Alterations removed if so requested by Landlord in writing at the time consent is granted.
8. ENVIRONMENTAL MATTERS
8.1 Compliance. Tenant shall, at its sole cost, comply with all Environmental Laws with respect to the Premises and Tenant’s operations.
8.2 Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials to be brought upon, stored, or used at the Premises except in de minimis quantities customary for similar operations and in compliance with Environmental Laws.
8.3 Environmental Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord and its Affiliates from any claim, cost, loss, or liability (including remediation costs) arising from (i) Tenant’s breach of this Article 8 or (ii) the presence or release of Hazardous Materials in or about the Premises or Project caused or permitted by Tenant. The obligations under this Section survive termination of the Lease.
8.4 Environmental Inspections. Landlord may, upon prior reasonable notice (except in emergencies), conduct environmental inspections or audits. Tenant shall cooperate and promptly correct any deficiencies.
9. INSURANCE
9.1 Tenant Insurance. Tenant shall maintain, at its sole cost:
(a) Commercial General Liability insurance with limits of not less than $[] per occurrence/$[] aggregate, naming Landlord and its property manager as additional insureds;
(b) Property insurance covering Tenant’s personal property and leasehold improvements on a special-form basis at replacement cost;
(c) Workers’ compensation as required by Colorado law; and
(d) Business interruption insurance for at least twelve (12) months of Rent.
9.2 Landlord Insurance. Landlord shall maintain property insurance for the Building on a replacement-cost, special-form basis and such other insurance as Landlord deems appropriate, the costs of which shall be included in Operating Expenses.
9.3 Waiver of Subrogation. Each party waives, and shall cause its insurers to waive, all rights of subrogation against the other party.
9.4 Certificates. On or before the Commencement Date and annually thereafter, Tenant shall deliver certificates of insurance evidencing the required coverages.
10. ASSIGNMENT AND SUBLETTING
10.1 Restriction. Tenant shall not, voluntarily or by operation of law, assign, mortgage, pledge, encumber, or otherwise transfer (collectively, “Transfer”) all or part of its interest in this Lease or sublease all or part of the Premises without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.
10.2 Transfer Procedure.
(a) Tenant shall give Landlord at least thirty (30) days’ prior written notice of any proposed Transfer, including financial statements of the transferee and all material terms.
(b) Within fifteen (15) days after receipt of the notice, Landlord shall elect to (i) consent to the Transfer; (ii) withhold consent (with reasonable grounds); or (iii) recapture the affected portion of the Premises (with respect to Transfers of more than fifty percent (50%) of the Premises for the remainder of the Term).
10.3 Conditions to Consent. Any consent shall be conditioned upon:
(a) No Event of Default existing;
(b) The transferee assuming in writing all obligations of Tenant;
(c) Tenant paying 50% of any excess rent or consideration (“Transfer Premium”) to Landlord within ten (10) days after receipt.
10.4 Permitted Transfers. “Permitted Transfer” means any Transfer to (i) an Affiliate of Tenant; (ii) a successor by merger, consolidation, or sale of substantially all Tenant’s assets, provided the successor has a tangible net worth not less than Tenant’s at execution; or (iii) an entity resulting from an initial public offering. Tenant must provide prior notice and assumption documentation, but Landlord’s consent is not required.
11. EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default. Each of the following constitutes an “Event of Default”:
(a) Failure to pay any Rent within five (5) days after written notice that such Rent is past due;
(b) Failure to perform any non-monetary obligation within thirty (30) days after written notice (or such longer period as reasonably necessary provided Tenant commences cure within such 30-day period and diligently pursues completion);
(c) Filing of a voluntary petition or similar relief under the Federal Bankruptcy Code;
(d) An involuntary bankruptcy petition not dismissed within sixty (60) days;
(e) Abandonment of the Premises; or
(f) Any Transfer in violation of Article 10.
11.2 Remedies. Upon an Event of Default, Landlord may exercise any combination of the following remedies, subject to Colorado commercial eviction procedures under the Colorado Forcible Entry and Detainer statutes, C.R.S. §§ 13-40-101 et seq.:
(a) Accelerate all Rent for the balance of the Term, discounted to present value at five percent (5%) per annum;
(b) Re-enter and take possession of the Premises, with or without termination;
(c) Terminate this Lease by written notice;
(d) Relet the Premises and recover the deficiency between reletting proceeds and Rent;
(e) Exercise statutory lien rights against Tenant’s property;
(f) Obtain injunctive relief and/or specific performance; and
(g) Recover all costs, including reasonable attorneys’ fees and expenses.
11.3 Notice Requirements. Any demand for compliance or possession shall comply with C.R.S. § 13-40-104 (three-day notice for commercial tenancies) or any successor statute.
12. RISK ALLOCATION
12.1 Indemnification by Tenant. Tenant shall indemnify, defend, and hold Landlord and its Affiliates harmless from any and all claims, damages, liabilities, or expenses (including reasonable attorneys’ fees) arising from (i) Tenant’s use or occupancy of the Premises; (ii) the conduct of Tenant’s business; (iii) any act or omission of Tenant or its agents, employees, or invitees; or (iv) any breach of this Lease by Tenant, except to the extent arising from the gross negligence or willful misconduct of Landlord.
12.2 Indemnification by Landlord. Landlord shall indemnify, defend, and hold Tenant harmless from any claim arising solely from the gross negligence or willful misconduct of Landlord or its authorized agents occurring in the common areas of the Project.
12.3 Limitation of Liability. EXCEPT FOR (i) INDEMNITY OBLIGATIONS EXPRESSLY PROVIDED, (ii) CLAIMS FOR PERSONAL INJURY OR PROPERTY DAMAGE CAUSED BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (iii) VIOLATIONS OF ENVIRONMENTAL LAWS, EACH PARTY’S AGGREGATE LIABILITY SHALL NOT EXCEED $[CAP AMOUNT] IN THE AGGREGATE. [// GUIDANCE: Insert “N/A” if no cap is desired.]
12.4 Waiver of Consequential Damages. Neither party shall be liable to the other for any punitive, exemplary, or consequential damages, including lost profits, business interruption, or similar damages.
13. CASUALTY; CONDEMNATION; FORCE MAJEURE
13.1 Casualty.
(a) If the Premises are damaged by fire or other casualty, Landlord shall, subject to insurance proceeds, restore the Premises to substantially the condition existing prior to the casualty.
(b) If restoration is reasonably expected to take longer than two hundred seventy (270) days, either party may terminate the Lease by written notice within thirty (30) days after receipt of Landlord’s restoration estimate.
(c) Abatement of Rent shall be proportionate to the untenantable portion of the Premises during restoration.
13.2 Condemnation. If all or a material part of the Premises is taken by eminent domain or conveyance in lieu thereof, either party may terminate this Lease effective on the date when possession is taken. Any award shall belong solely to Landlord; provided, Tenant may pursue a separate claim for relocation expenses or loss of goodwill.
13.3 Force Majeure. Neither party shall be liable for failure to perform (other than monetary obligations) due to Force Majeure, defined as acts of God, war, terrorism, civil commotion, governmental action, labor disputes, or shortages of materials, provided such party gives the other written notice within ten (10) days after the event and resumes performance promptly thereafter.
14. DISPUTE RESOLUTION
14.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to conflict-of-law principles.
14.2 Forum Selection. The parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Colorado, and waive any objection based on forum non conveniens.
14.3 Arbitration (Optional). [SELECT ONE: (a) The parties agree that any dispute shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules in [CITY], Colorado; OR (b) Arbitration shall not apply unless the parties execute a separate arbitration agreement.]
14.4 Jury Waiver (Optional). TO THE EXTENT PERMITTED BY LAW, EACH PARTY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS LEASE.
14.5 Equitable Relief. Notwithstanding Section 14.3, either party may seek injunctive relief, including eviction, in a court of competent jurisdiction pursuant to C.R.S. §§ 13-40-101 et seq.
14.6 Attorneys’ Fees. The prevailing party in any dispute shall be entitled to recover reasonable attorneys’ fees, expert fees, and costs.
15. NOTICES
15.1 Requirements. All notices shall be in writing and deemed given when delivered (i) by hand with signed receipt; (ii) by certified U.S. mail, return receipt requested; (iii) by nationally recognized overnight courier; or (iv) by email with confirmation of transmission, provided a hard copy is also sent by method (ii) or (iii).
15.2 Addresses.
Landlord:
[LANDLORD NOTICE ADDRESS]
Email: [EMAIL]
Tenant:
[TENANT NOTICE ADDRESS]
Email: [EMAIL]
Either party may change its notice address by written notice in accordance with this Article.
16. GENERAL PROVISIONS
16.1 Amendments; Waivers. Any amendment or waiver must be in a writing signed by both parties. No waiver shall be deemed a continuing waiver unless expressly stated.
16.2 Successors and Assigns. Subject to Article 10, this Lease binds and benefits the parties and their respective successors and permitted assigns.
16.3 Severability. If any provision is held invalid, the remainder of the Lease shall not be affected, and the parties shall negotiate a lawful substitute provision that most closely effects the parties’ original intent.
16.4 Entire Agreement. This Lease, including all exhibits and addenda, constitutes the entire agreement and supersedes all prior understandings, oral or written, regarding the Premises.
16.5 Counterparts; Electronic Signatures. This Lease may be executed in counterparts, each of which is an original, and all of which together constitute one and the same instrument. Signatures delivered by electronic means (e.g., PDF or DocuSign) shall be deemed originals.
16.6 No Recording. Tenant shall not record this Lease; however, either party may record a short-form memorandum in form reasonably acceptable to Landlord.
16.7 Confidentiality. The terms of this Lease are confidential and shall not be disclosed by Tenant except to its attorneys, accountants, insurers, lenders, or as required by law.
16.8 Time of Essence. Time is of the essence with respect to each obligation under this Lease.
17. EXECUTION BLOCK
IN WITNESS WHEREOF, Landlord and Tenant have caused this Commercial Lease Agreement to be executed as of the Effective Date.
LANDLORD:
[LANDLORD LEGAL NAME]
a [STATE] [ENTITY TYPE]
By: ____
Name: ____
Title: ____
Date: ________
TENANT:
[TENANT LEGAL NAME]
a [STATE] [ENTITY TYPE]
By: ____
Name: ____
Title: ____
Date: ________
[SEAL IF APPLICABLE]
[// GUIDANCE: Colorado does not require notarization of a lease shorter than three (3) years for enforceability, but consider notarizing for recording purposes if a memorandum will be recorded. Attach Exhibits A–C and any additional riders as needed.]