COMMERCIAL LEASE AGREEMENT
State of Iowa
[// GUIDANCE: This template is drafted to satisfy Iowa commercial real estate requirements in effect as of the date of drafting. Practitioners should confirm no material statutory or regulatory changes have occurred before final use.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Premises, Term & Possession
- Rent, Additional Rent & Security Deposit
- Use of Premises; Compliance & Environmental Matters
- Maintenance, Repairs & Alterations
- Insurance & Risk of Loss
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Title; Parties.
This Commercial Lease Agreement (the “Lease”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• Landlord: [LANDLORD LEGAL NAME], a [STATE] [ENTITY TYPE] with principal address at [ADDRESS] (“Landlord”); and
• Tenant: [TENANT LEGAL NAME], a [STATE] [ENTITY TYPE] with principal address at [ADDRESS] (“Tenant”).
Landlord and Tenant are sometimes referred to individually as a “Party” and collectively as the “Parties.”
1.2 Recitals.
A. Landlord is fee owner of the real property located at [STREET ADDRESS, CITY, COUNTY, IA ZIP] and legally described in Exhibit A (the “Property”), including the leasehold premises depicted on Exhibit B (the “Premises”).
B. Landlord desires to lease the Premises to Tenant, and Tenant desires to lease the Premises from Landlord, on the terms set forth herein.
C. For good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows.
2. DEFINITIONS
The following terms shall have the meanings set forth below. Capitalized terms used but not defined elsewhere in the Lease shall have the meanings assigned in this Section 2.
“Additional Rent” – All amounts other than Base Rent payable by Tenant, including Operating Expenses, Late Charges, and any other reimbursable sums.
“Base Rent” – The monthly rent payable pursuant to Section 4.1.
“Business Day” – Any day other than Saturday, Sunday, or an Iowa state or U.S. federal holiday.
“Commencement Date” – The date possession is tendered to Tenant in the condition required by this Lease or such other date the Parties designate in writing.
“Environmental Law(s)” – Any present or future federal, state, or local statute, regulation, ordinance, rule, permit, guideline, judgment, or common-law doctrine regulating or relating to Hazardous Materials, the environment, or human health and safety.
“Hazardous Materials” – Any substance, material, or waste that is regulated, classified, or otherwise controlled pursuant to Environmental Laws, including petroleum products and asbestos-containing materials.
“Operating Expenses” – All costs, expenses, and disbursements incurred by Landlord in owning, operating, managing, repairing, and maintaining the Property, as more fully described in Section 4.3.
“Permitted Use” – [SPECIFY BUSINESS TYPE]; any change thereto requires Landlord’s prior written consent.
“Rent” – Collectively, Base Rent and Additional Rent.
“Term” – The period beginning on the Commencement Date and ending on the Expiration Date, subject to earlier termination as provided herein.
[// GUIDANCE: Add additional defined terms as needed for unique deal structures.]
3. PREMISES, TERM & POSSESSION
3.1 Lease of Premises. Landlord hereby leases the Premises to Tenant, and Tenant leases the Premises from Landlord, together with the non-exclusive right to use common areas of the Property.
3.2 Term.
(a) Initial Term: The Term shall commence on the Commencement Date and continue for [NUMBER] months, expiring on [EXPIRATION DATE] (the “Expiration Date”), unless sooner terminated.
(b) Renewal Options: Tenant shall have [NUMBER] option(s) to renew for [PERIOD EACH] upon at least [DAYS] days’ written notice prior to Expiration Date, subject to the conditions herein.
3.3 Delivery & Condition.
Landlord shall deliver the Premises with Building systems in good working order and in broom-clean condition. Tenant’s acceptance of possession shall be conclusive evidence of delivery in the required condition, except for latent defects identified by Tenant by written notice within [30] days after possession.
3.4 Possession Delay. If Landlord fails to deliver possession on the Commencement Date, Rent shall abate until delivery; such delay shall not void this Lease or impose liability on Landlord, except Tenant may terminate if possession is not delivered within [120] days.
4. RENT, ADDITIONAL RENT & SECURITY DEPOSIT
4.1 Base Rent. Tenant shall pay Landlord Base Rent in the amount of $[AMOUNT] per month, in advance, on or before the first (1st) Business Day of each calendar month during the Term. Base Rent for any partial month shall be prorated.
4.2 Security Deposit. Upon execution, Tenant shall deposit $[AMOUNT] (the “Security Deposit”) as security for performance. Landlord may commingle but shall account for such funds. Landlord may apply the Security Deposit to cure Tenant defaults; Tenant shall replenish within [10] Business Days after written demand.
4.3 Additional Rent – Operating Expenses.
(a) Estimate & Reconciliation: Landlord shall annually estimate Operating Expenses. Tenant shall pay one-twelfth (1/12) of its Proportionate Share of estimated Operating Expenses monthly. Within [120] days after each calendar year, Landlord shall provide a statement and reconcile over/under-payments.
(b) Audit Right: Tenant may, upon 30 days’ notice and not more than once per year, audit Landlord’s records at Tenant’s cost, provided Tenant uses a licensed CPA and executes a confidentiality agreement.
4.4 Late Charges & Interest. If any Rent is not received within [5] days after due, Tenant shall pay (i) a late charge of [5]% of the delinquent amount, and (ii) interest at the lesser of [10]% per annum or the maximum lawful rate from due date until paid.
5. USE OF PREMISES; COMPLIANCE & ENVIRONMENTAL MATTERS
5.1 Permitted Use. Tenant shall use the Premises solely for the Permitted Use and for no other purpose without Landlord’s prior written consent.
5.2 Legal Compliance.
(a) Tenant, at its sole cost, shall comply with all statutes, ordinances, regulations, and orders of governmental authorities having jurisdiction (“Legal Requirements”), including without limitation zoning, building code, accessibility, fire and life safety, and Environmental Laws.
(b) Landlord shall comply with Legal Requirements applicable to the structural components of the Building.
5.3 Environmental Covenants.
(a) Tenant Representations: Tenant represents it shall not cause or permit Hazardous Materials to be generated, used, stored, released, or disposed of on or about the Premises, except for de minimis quantities customarily used in the ordinary course of the Permitted Use and in compliance with Environmental Laws.
(b) Tenant Indemnity: Tenant shall indemnify, defend, and hold Landlord harmless from any and all claims, costs, liabilities, and damages (including remediation costs and reasonable attorneys’ fees) arising out of or related to Tenant’s breach of Environmental Laws or release of Hazardous Materials.
(c) Inspections: Landlord may, on reasonable notice (except in emergency), conduct environmental inspections or testing. Tenant shall promptly remedy any violation revealed at Tenant’s sole cost.
[// GUIDANCE: Iowa law imposes strict liability for certain environmental releases; consider requiring environmental insurance for high-risk uses.]
6. MAINTENANCE, REPAIRS & ALTERATIONS
6.1 Tenant Obligations. Tenant, at its expense, shall maintain the Premises, including interior surfaces, non-structural elements, and all improvements installed by Tenant, in good order and repair, ordinary wear excepted.
6.2 Landlord Obligations. Landlord shall maintain and repair the roof, structural elements, and Building systems (HVAC, electrical, plumbing) serving the Premises, the cost of which shall be included in Operating Expenses except for capital improvements, which shall be amortized per GAAP over the useful life.
6.3 Alterations. Tenant shall not make any alterations, additions, or improvements (collectively “Alterations”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. All Alterations shall be performed by licensed contractors in accordance with Legal Requirements and with commercially reasonable insurance. Unless Landlord elects otherwise in writing at the time of approval, all Alterations shall become Landlord’s property upon installation.
7. INSURANCE & RISK OF LOSS
7.1 Tenant Insurance. Throughout the Term Tenant shall maintain:
(a) Commercial General Liability insurance with limits of not less than $[1,000,000] per occurrence and $[2,000,000] aggregate;
(b) Property insurance covering Tenant’s personal property, inventory, trade fixtures, and Alterations on an “all-risk” basis at replacement cost;
(c) Workers’ compensation as required by Iowa law; and
(d) Environmental liability insurance with limits of $[AMOUNT], if required by Landlord based on the Permitted Use.
Landlord and its mortgagee(s) shall be named as additional insureds (except under workers’ compensation). Certificates shall be delivered prior to occupancy and at each renewal.
7.2 Landlord Insurance. Landlord shall maintain property insurance on the Building (excluding Tenant’s property) in an amount not less than 100% of replacement cost and liability insurance with limits not less than those required of Tenant.
7.3 Waiver of Subrogation. To the extent permitted by law and covered by insurance, each Party waives all rights of recovery against the other for any loss or damage covered by its insurance.
8. REPRESENTATIONS & WARRANTIES
8.1 Mutual. Each Party represents that:
(a) It is duly organized, validly existing, and in good standing under the laws of its state of formation;
(b) It has full power and authority to enter into and perform its obligations under this Lease;
(c) This Lease constitutes a valid and binding obligation enforceable against it in accordance with its terms.
8.2 Landlord. Landlord further represents that it holds fee simple title to the Property free of monetary liens other than those disclosed on Exhibit C and has not received written notice of any condemnation or zoning change proceedings affecting the Property.
8.3 Tenant. Tenant acknowledges that it has inspected (or had the opportunity to inspect) the Premises and enters this Lease based on its own investigation.
8.4 Survival. The representations and warranties in this Article 8 shall survive the expiration or earlier termination of the Lease.
9. COVENANTS & RESTRICTIONS
9.1 Affirmative Covenants of Tenant. Tenant shall:
(a) Pay Rent when due;
(b) Keep the Premises clean, safe, and free of waste;
(c) Promptly notify Landlord of any condition requiring repair;
(d) Maintain all licenses and permits required for the Permitted Use;
(e) Comply with rules and regulations promulgated by Landlord (Exhibit D), provided they are uniformly applied and not materially inconsistent with this Lease.
9.2 Negative Covenants of Tenant. Without Landlord’s prior written consent, Tenant shall not:
(a) Create any lien, encumbrance, or security interest against the Property;
(b) Assign this Lease or sublet all or any part of the Premises, except in accordance with Section 9.3;
(c) Conduct any auction, liquidation, or fire sale on the Premises;
(d) Use or allow the use of the Premises for any illegal purpose or nuisance.
9.3 Assignment & Subletting.
(a) Tenant may not assign, sublet, transfer, or encumber its interest (collectively, “Transfer”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed.
(b) Landlord may require (i) copies of the proposed assignee/subtenant’s financials, (ii) a fully executed Transfer instrument, and (iii) reimbursement of Landlord’s reasonable attorneys’ fees (not to exceed $[AMOUNT]).
(c) No Transfer shall relieve Tenant of liability under this Lease unless Landlord expressly releases Tenant in writing.
(d) Any Transfer to an affiliate controlling, controlled by, or under common control with Tenant shall not require Landlord’s consent, provided Tenant gives at least [30] days’ prior written notice and satisfies (b)(i)–(iii).
[// GUIDANCE: Iowa law allows parties to negotiate freely re: assignment; courts enforce clear consent standards. “Reasonableness” language helps avoid restraint-on-alienation challenges.]
10. DEFAULT & REMEDIES
10.1 Tenant Events of Default. The occurrence of any of the following shall constitute a default by Tenant:
(a) Failure to pay any Rent within [5] days after written notice of non-payment (provided, such notice is not required more than two times in any 12-month period);
(b) Failure to perform any non-monetary obligation within [30] days after written notice (or such longer period as reasonably necessary if cure commenced within 30 days and diligently pursued);
(c) Abandonment or vacation of the Premises for more than [10] consecutive Business Days;
(d) Filing of voluntary bankruptcy or insolvency proceeding by Tenant, or involuntary proceeding not dismissed within [60] days;
(e) Material misrepresentation by Tenant in connection with this Lease.
10.2 Landlord Remedies. On Tenant default, Landlord may, subject to applicable Iowa forcible entry and detainer statutes and after required notices:
(a) Terminate Tenant’s right of possession and recover unpaid Rent plus future Rent accelerated to the end of the Term discounted at [6]% per annum;
(b) Enter and take possession of the Premises and relet, crediting net proceeds against Tenant’s obligations;
(c) Maintain Tenant’s right to possession and sue for Rent as it accrues;
(d) Seek injunctive relief, specific performance, and any other remedy available at law or equity;
(e) Recover all costs of enforcement, including reasonable attorneys’ fees.
10.3 Landlord Default; Tenant Remedies. If Landlord fails to perform any covenant within [30] days after written notice (or such longer period as reasonably necessary), Tenant may (a) perform the obligation and deduct reasonable out-of-pocket costs from Rent (cure-and-deduct capped at [2] months’ Base Rent per calendar year), or (b) seek specific performance or damages, but Tenant shall have no right to terminate or withhold Rent except as expressly provided.
11. RISK ALLOCATION
11.1 Indemnification.
(a) Tenant Use Indemnity: Tenant shall indemnify, defend, and hold Landlord, its officers, directors, members, employees, and agents harmless from claims, losses, or damages arising out of (i) Tenant’s use or occupancy of the Premises, (ii) breach of this Lease, or (iii) acts or omissions of Tenant or its invitees, except to the extent caused by Landlord’s gross negligence or willful misconduct.
(b) Landlord Indemnity: Landlord shall indemnify Tenant for claims arising from Landlord’s gross negligence or willful misconduct.
11.2 Limitation of Liability.
[NEGOTIABLE LANGUAGE – SELECT ONE]
Option A (No Cap): Neither Party’s liability is capped except as expressly limited herein.
Option B (Cap): Except for indemnity obligations, environmental liabilities, or claims arising from gross negligence or willful misconduct, each Party’s aggregate liability shall not exceed $[CAP AMOUNT].
11.3 Force Majeure. Neither Party shall be liable for failure to perform (other than payment of Rent) due to causes beyond its reasonable control, including acts of God, war, terrorism, epidemic, governmental action, or labor dispute; performance deadlines shall be extended for the duration of the delay.
12. DISPUTE RESOLUTION
12.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of Iowa, without regard to conflict-of-laws principles.
12.2 Forum Selection. The Parties consent to exclusive jurisdiction of the state courts located in [COUNTY], Iowa, and waive any objection to venue therein.
12.3 Arbitration (Optional).
[SELECT ONLY IF ELECTED]
If “Arbitration – Yes” is indicated in Section 12.6 below, any dispute not resolved by negotiation within 30 days shall be finally settled by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. The arbitration shall be conducted in [CITY], Iowa by one arbitrator. Judgment on the award may be entered in any court of competent jurisdiction.
12.4 Jury Waiver (Optional).
Each Party hereby knowingly and voluntarily waives trial by jury in any action or proceeding arising out of or relating to this Lease.
[// GUIDANCE: Iowa courts enforce clear jury waivers contained in commercial contracts when conspicuous; ensure font/format differences in final draft.]
12.5 Injunctive Relief. Nothing in this Article shall limit either Party’s right to seek temporary, preliminary, or permanent injunctive relief (including forcible entry and detainer or eviction) to enforce rights under this Lease.
12.6 Election Table.
| Provision | Elected (Yes/No) |
|---|---|
| Arbitration | [YES/NO] |
| Jury Waiver | [YES/NO] |
13. GENERAL PROVISIONS
13.1 Amendments & Waivers. No amendment or waiver is effective unless in writing and signed by the Party against whom enforcement is sought. A waiver on one occasion is not a waiver of any future breach.
13.2 Notices. All notices shall be in writing and deemed given (i) when delivered in person, (ii) one Business Day after deposit with a nationally recognized overnight courier, or (iii) three Business Days after deposit in U.S. Mail, certified, return-receipt requested, postage prepaid, addressed to the Party at its Notice Address below (or such other address as it designates by notice):
Landlord Notice Address: [ADDRESS]
Tenant Notice Address: [ADDRESS]
13.3 Successors & Assigns. This Lease binds and benefits the Parties and their permitted successors and assigns.
13.4 Severability. If any provision is held invalid, the remainder of the Lease shall remain in effect, and the invalid provision shall be modified to the minimum extent necessary to make it enforceable.
13.5 Entire Agreement. This Lease (with Exhibits) constitutes the entire agreement between the Parties regarding the Premises and supersedes all prior or contemporaneous understandings.
13.6 Counterparts; Electronic Signatures. This Lease may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered via electronic means (e.g., PDF, DocuSign) are binding.
13.7 Memorandum of Lease. Upon either Party’s request, the Parties shall execute and record a short-form memorandum of lease containing the material terms, exclusive of economic provisions.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Lease as of the Effective Date.
Landlord:
[LANDLORD LEGAL NAME]
By: _______
Name: [PRINTED NAME]
Title: [TITLE]
Tenant:
[TENANT LEGAL NAME]
By: _______
Name: [PRINTED NAME]
Title: [TITLE]
[Optional Notary Acknowledgment – include if required for recordability under Iowa law.]
EXHIBITS
Exhibit A – Legal Description of Property
Exhibit B – Floor Plan / Premises Diagram
Exhibit C – List of Recorded Encumbrances
Exhibit D – Building Rules & Regulations
Exhibit E – Estoppel Certificate Form
Exhibit F – Memorandum of Lease Form
[// GUIDANCE: Before execution, confirm compliance with any county-specific recording requirements, zoning confirmations, and obtain lender’s SNDA if property is encumbered.]
End of Document