Commercial Lease Agreement - Michigan

COMMERCIAL LEASE AGREEMENT

(State of Michigan)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Premises, Term, and Possession
4. Rent and Additional Charges
5. Taxes, Utilities, and Operating Expenses
6. Use of Premises; Compliance; Environmental Matters
7. Improvements, Maintenance, and Repairs
8. Insurance
9. Assignment and Subletting
10. Representations and Warranties
11. Covenants of Tenant
12. Defaults and Remedies
13. Risk Allocation
14. Dispute Resolution
15. General Provisions
16. Execution Block

1. DOCUMENT HEADER

1.1 Parties.
This Commercial Lease Agreement (“Lease”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [LANDLORD LEGAL NAME], a [STATE] [ENTITY TYPE] (“Landlord”), and [TENANT LEGAL NAME], a [STATE] [ENTITY TYPE] (“Tenant”). Landlord and Tenant are sometimes herein referred to individually as a “Party” and collectively as the “Parties.”

1.2 Premises Identification.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the real property commonly known as [STREET ADDRESS, CITY, MI ZIP] (the “Building”), together with the premises consisting of approximately [SQUARE FEET] rentable square feet located therein and depicted on Exhibit A (the “Premises”).

1.3 Recitals.
A. Landlord is the fee simple owner of the Building.
B. Tenant desires to lease the Premises for commercial purposes, and Landlord is willing to lease the Premises to Tenant on the terms and conditions set forth herein.
C. The consideration for this Lease is the mutual covenants, promises, and agreements set forth below.

1.4 Governing Law and Jurisdiction.
This Lease shall be governed by and construed in accordance with the laws of the State of Michigan without regard to its conflict-of-laws principles.

2. DEFINITIONS

For ease of reference, the following terms shall have the meanings set forth below. Defined terms appear in alphabetical order and may be utilized throughout this Lease.

“Additional Rent” – Any monetary obligation of Tenant other than Base Rent, including but not limited to Taxes, Operating Expenses, Utilities Charges, late fees, and indemnity obligations.

“Base Rent” – The fixed rental amount set forth in Section 4.1, subject to adjustments therein.

“Building Systems” – The structural, mechanical, electrical, plumbing, HVAC, life-safety, and other systems serving the Building and/or the Premises.

“Commencement Date” – The date on which Tenant’s obligation to pay Base Rent commences, as determined under Section 3.2.

“Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law rules relating to environmental protection, including without limitation 42 U.S.C. §§ 9601 et seq., and corresponding Michigan statutes.

“Event of Default” – Any event described in Section 12.1.

“Force Majeure Event” – Defined in Section 13.4.

“Hazardous Materials” – Any substance defined, classified, or regulated under Environmental Laws, including without limitation petroleum products and asbestos.

“Lease Term” – The period commencing on the Commencement Date and continuing for the number of months specified in Section 3.1, as the same may be extended or sooner terminated pursuant to this Lease.

“Operating Expenses” – The expenses described in Section 4.3.

“Permitted Use” – The use specified in Section 6.1.

“Taxes” – All real estate taxes, personal property taxes, assessments, and governmental impositions allocable to the Building, as more fully described in Section 4.2.

3. PREMISES, TERM, AND POSSESSION

3.1 Term.
The Lease Term shall be [______ (___)] months, commencing on the Commencement Date and expiring at 11:59 p.m. Eastern Time on the last day of the Lease Term (the “Expiration Date”), unless sooner terminated or extended pursuant to this Lease.

3.2 Commencement Date; Early Access.
(a) The “Commencement Date” shall be the earlier of (i) the date Tenant first conducts business in the Premises, or (ii) [SPECIFY DATE/CERTIFICATE OF OCCUPANCY].
(b) Landlord may permit Tenant early access for installation of furniture, fixtures, and equipment (“FF&E”) subject to Section 7.

3.3 Delivery Condition.
Landlord shall deliver the Premises on the Commencement Date in broom-clean condition, with all Building Systems serving the Premises in good working order.

3.4 Surrender.
Upon the Expiration Date or earlier termination, Tenant shall surrender the Premises in the condition required under Section 7.3.

4. RENT AND ADDITIONAL CHARGES

4.1 Base Rent.
Tenant shall pay to Landlord Base Rent in the annual amount of $[___], payable in equal monthly installments of $[___] on or before the first (1st) day of each calendar month.

4.2 Taxes.
(a) Tenant shall pay, as Additional Rent, Tenant’s Proportionate Share of Taxes, within thirty (30) days after Landlord’s written statement.
(b) Taxes shall include amounts levied by any governmental authority pursuant to Mich. Comp. Laws §§ 211.1 et seq. or successor statutes.

4.3 Operating Expenses.
Tenant shall reimburse Landlord monthly for Tenant’s Proportionate Share ([___]%) of Operating Expenses, including maintenance, insurance premiums, management fees, and utilities for common areas.

4.4 Utilities.
Tenant shall contract for and pay all utilities serving the Premises directly to the providers, or reimburse Landlord if centrally metered.

4.5 Late Charges; Interest.
Any Rent not paid within [____] days after due shall bear interest at [____]% per annum, not exceeding the lawful rate, and a late charge of $[____] or [____]%. Counsel shall confirm that each charge is reasonable, accurately described, and enforceable for this transaction.

5. TAXES, UTILITIES, AND OPERATING EXPENSES

5.1 Personal Property Taxes.
Tenant shall pay before delinquency all taxes assessed against Tenant’s trade fixtures, inventory, equipment, and other personal property.

5.2 Utility Interruption.
Landlord shall not be liable for any interruption in utilities unless caused by Landlord’s gross negligence or willful misconduct. Rent shall abate only as provided in Section 13.3.

6. USE OF PREMISES; COMPLIANCE; ENVIRONMENTAL MATTERS

6.1 Permitted Use.
The Premises shall be used solely for [SPECIFY USE, e.g., general office, retail, warehouse] and for no other purpose without Landlord’s prior written consent.

6.2 Compliance with Laws.
Tenant shall, at its sole cost, comply with all present and future laws, ordinances, regulations, and orders applicable to Tenant’s use and occupancy, including without limitation (i) the Michigan Occupational Safety and Health Act, and (ii) all Environmental Laws.

6.3 Environmental Covenants.
(a) Tenant shall not cause or permit Hazardous Materials to be brought onto, stored, generated, disposed of, or released in or about the Premises or the Building, except for limited quantities customarily used in connection with the Permitted Use and in compliance with Environmental Laws.
(b) Tenant shall promptly notify Landlord of any Environmental Claim or condition and shall promptly undertake remediation in accordance with Environmental Laws.
(c) Tenant’s obligations under this Section shall survive the expiration or earlier termination of this Lease.

6.4 Accessibility Compliance.
The Parties shall allocate in Exhibit [____] responsibility for existing-barrier review, alterations, paths of travel, common areas, the Premises, permits, and accommodation requests. This private allocation does not change the duties that applicable law may place on an owner, lessor, lessee, or operator. See 42 U.S.C. §§ 12182 and 12183.

7. IMPROVEMENTS, MAINTENANCE, AND REPAIRS

7.1 Tenant Improvements.
All alterations, additions, or improvements (“Alterations”) shall require Landlord’s prior written approval and shall be performed in a lien-free, first-class manner in compliance with all applicable codes. Landlord may condition approval upon Tenant providing payment and performance bonds.

7.2 Maintenance by Tenant.
Tenant shall, at its sole cost and without notice, maintain the Premises and all improvements therein, including interior plumbing, HVAC within the Premises, and fixtures, in good order and repair.

7.3 Landlord Repairs.
Landlord shall maintain the Building Structure and Building Systems serving the Premises, the cost of which shall be included in Operating Expenses except as attributable to Tenant’s negligence or breach.

7.4 Liens.
Tenant shall keep the Premises free from any mechanic’s or materialman’s liens arising out of any Alterations.

8. INSURANCE

8.1 Required Policies.
Tenant shall, at its sole expense, maintain throughout the Lease Term:
(a) Commercial General Liability Insurance with limits of not less than $[2,000,000] per occurrence and $[2,000,000] aggregate, naming Landlord and Landlord’s managing agent as additional insureds;
(b) All-risk property insurance on Tenant’s personal property and Alterations at full replacement cost;
(c) Workers’ compensation insurance as required by Michigan law.

8.2 Landlord’s Insurance.
Landlord shall maintain property insurance covering the Building (excluding Tenant’s property) and liability insurance customary for similar properties, the premiums for which shall be included in Operating Expenses.

8.3 Waiver of Subrogation.
To the extent covered by insurance and permitted by each applicable policy, each Party waives insured claims against the other and shall request any endorsement needed to waive the insurer's subrogation right. This clause does not require an insurer to waive rights without its written agreement.

9. ASSIGNMENT AND SUBLETTING

9.1 Restriction.
Tenant shall not assign, transfer, mortgage, pledge, encumber, or otherwise convey this Lease, nor sublet all or any portion of the Premises (collectively, “Transfer”), without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.

9.2 Recapture Right.
Landlord may, by written notice within fifteen (15) days after receiving Tenant’s Transfer request, (a) consent, (b) deny consent with commercially reasonable justification, or (c) elect to recapture the space proposed to be Transferred.

9.3 Profit Sharing.
If the consideration from any Transfer exceeds the Rent payable hereunder, Tenant shall pay fifty percent (50%) of such excess to Landlord as Additional Rent.

9.4 Permitted Transfers.
Transfers to (i) an Affiliate that controls, is controlled by, or is under common control with Tenant, or (ii) a successor by merger or asset sale, shall not require Landlord’s consent provided Tenant delivers reasonable evidence of the Affiliate’s or successor’s net worth and assuming no Event of Default then exists.

10. REPRESENTATIONS AND WARRANTIES

10.1 Mutual Representations.
Each Party represents and warrants to the other 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 execute and deliver this Lease and to perform its obligations; and
(c) this Lease has been duly authorized, executed, and delivered and constitutes a valid and binding obligation enforceable against such Party.

10.2 Survival.
All representations and warranties shall survive the execution of this Lease and, where applicable, the termination of this Lease.

11. COVENANTS OF TENANT

11.1 Affirmative Covenants.
Tenant shall:
(a) pay all Rent when due;
(b) maintain the Premises as required under Section 7.2;
(c) comply with all laws and obtain all permits required for the Permitted Use;
(d) maintain required insurance and provide certificates upon request; and
(e) deliver to Landlord estoppel certificates within ten (10) business days of request.

11.2 Negative Covenants.
Tenant shall not:
(a) abandon or vacate the Premises;
(b) create any nuisance or excessive noise;
(c) use the Premises for any unlawful or hazardous purpose; or
(d) overload Building Systems or install any equipment without Landlord’s approval.

12. DEFAULTS AND REMEDIES

12.1 Events of Default.
The occurrence of any of the following shall constitute an “Event of Default”:
(a) Failure to pay Rent when due and failure to cure after the written demand and time required by this Lease and applicable Michigan law. For a possession proceeding based on nonpayment, Mich. Comp. Laws §§ 554.134(2) and 600.5714(1)(a) currently use a seven-day written notice/demand route.
(b) Failure to perform any other covenant within thirty (30) days after written notice, or such longer period as necessary provided Tenant commences cure within such thirty (30) days and diligently prosecutes to completion.
(c) A bankruptcy or insolvency event only to the extent it creates an enforceable default under applicable law. This clause does not override 11 U.S.C. § 365(e), which generally makes a lease term conditioned solely on insolvency, commencement of a bankruptcy case, or appointment of a trustee or custodian ineffective during the case, subject to the statute's exceptions.
(d) Assignment or Transfer in violation of Section 9.
(e) Abandonment of the Premises.

12.2 Landlord Remedies.
Upon any Event of Default, Landlord may, subject to applicable law and without prejudice to any other rights:

1. Terminate this Lease when the Lease and applicable law permit, serve a compliant demand, and seek possession through Michigan summary proceedings under Mich. Comp. Laws §§ 600.5701 et seq.;
2. Recover accrued Rent and any other damages proved and recoverable under the Lease and applicable law in the proper action. Accelerated indebtedness is not “rent due” in a nonpayment possession proceeding under Mich. Comp. Laws § 600.5714(1)(a);
3. After possession is lawfully restored, relet the Premises and credit net proceeds as required by the Lease and applicable law;
4. Perform a curable Tenant maintenance obligation after the agreed notice and cure period and charge reasonable, documented costs, without lockout, removal of property, essential-service interruption, or other interference with Tenant’s possession; and
5. Recover taxable costs and attorney fees only when a contract, statute, court rule, or other applicable authority permits them.

12.3 Cumulative Remedies.
Except where an election, satisfaction, statute, rule, or court order makes remedies inconsistent, available remedies may be pursued in the sequence permitted by applicable law. No remedy clause authorizes duplicate recovery.

12.4 Mitigation.
After termination or repossession, Landlord shall use commercially reasonable efforts to reduce avoidable loss, without guaranteeing a replacement tenant or a particular rental rate. Counsel shall tailor the reletting and credit mechanics to the transaction and current Michigan law.

13. RISK ALLOCATION

13.1 Tenant Use Indemnity.
Tenant shall defend, indemnify, and hold harmless Landlord, its affiliates, and their respective agents and employees (collectively, “Landlord Indemnitees”) from and against any and all claims, damages, liabilities, losses, costs, and expenses (including reasonable attorney fees) arising from (a) Tenant’s use or occupancy of the Premises, (b) the conduct of Tenant’s business, (c) any act, omission, or negligence of Tenant or its agents, contractors, or invitees, or (d) any breach of this Lease by Tenant, except to the extent resulting from the gross negligence or willful misconduct of Landlord Indemnitees.

13.2 Limitation of Liability.
[OPTIONAL — COUNSEL TO DRAFT: Any liability limitation must identify the covered claims and negotiated exclusions. It must not waive Mich. Comp. Laws § 600.2918, which makes its possession protections nonwaivable, or restrict relief that applicable law does not permit the Parties to limit.]

13.3 Casualty and Condemnation.
(a) If the Premises are damaged by fire or other casualty, Landlord shall repair within a reasonable time; Rent shall equitably abate during the repair period to the extent of untenantability.
(b) If the Premises are materially damaged (exceeding [50]%) or condemnation renders the Premises unusable, either Party may terminate this Lease upon thirty (30) days’ notice.

13.4 Force Majeure.
Neither Party shall be liable for failure to perform due to strike, acts of God, governmental action, or other events beyond the affected Party’s reasonable control (a “Force Majeure Event”), provided such Party notifies the other within five (5) business days and resumes performance promptly thereafter. Rent and monetary obligations are not excused by Force Majeure.

14. DISPUTE RESOLUTION

14.1 Governing Law.
This Lease shall be governed by the internal laws of the State of Michigan.

14.2 Forum Selection.
Subject to Section 14.3, disputes shall be brought in a Michigan court with subject-matter and territorial jurisdiction. A possession claim under Chapter 57 must proceed in the court authorized by Mich. Comp. Laws § 600.5704 and applicable court rules; the Parties do not create jurisdiction by agreement.

14.3 Optional Arbitration.
[OPTIONAL — USE ONLY IF BOTH PARTIES EXPRESSLY AGREE: Except for possession proceedings and requests for provisional court relief, a dispute within the scope stated here shall be resolved by binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association in [COUNTY], Michigan. Counsel shall define scope, initiation, arbitrator selection, allocation of fees, discovery, remedies, and court enforcement.]

14.4 Jury Trial Waiver.
[OPTIONAL: Each Party hereby waives its right to trial by jury in any litigation arising out of this Lease.]

14.5 Injunctive Relief.
Nothing in this Section prevents either Party from seeking provisional or equitable relief that an applicable court may award. Possession is recovered through the demand, summary-proceeding, judgment, and writ process—not by private injunctive or self-help language. Mich. Comp. Laws § 600.2918(6) separately permits a person whose possession was unlawfully interfered with to seek injunctive relief in circuit court.

15. GENERAL PROVISIONS

15.1 Notices.
All notices shall be in writing and deemed given (a) when delivered in person, (b) one (1) business day after deposit with a nationally recognized overnight courier, or (c) three (3) business days after mailing by certified U.S. Mail, return receipt requested, to the addresses set forth below (or such other address as either Party may designate by notice).

Landlord:
[ADDRESS]
Attention: [NAME/TITLE]

Tenant:
[ADDRESS]
Attention: [NAME/TITLE]

15.2 Amendments and Waivers.
No amendment or waiver shall be effective unless in writing signed by both Parties. Waiver of any breach shall not be deemed a waiver of any subsequent breach.

15.3 Successors and Assigns.
This Lease shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

15.4 Severability.
If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be interpreted to accomplish its intended economic effect to the greatest extent permitted by law.

15.5 Entire Agreement; Merger.
This Lease (including all exhibits and addenda) constitutes the entire agreement between the Parties regarding the Premises and supersedes all prior understandings.

15.6 Counterparts; Electronic Signatures.
This Lease may be executed in counterparts. If the Parties agree to conduct this transaction electronically, electronic records and signatures have the effect provided by Mich. Comp. Laws §§ 450.835 and 450.837. Counsel shall confirm any separate execution, acknowledgment, lender, or recording requirements applicable to the transaction.

15.7 Confidentiality.
Tenant shall keep the terms of this Lease confidential except as required by law or to its lenders, attorneys, accountants, and prospective transferees under confidentiality obligations.

16. 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: _____________________________

[NOTARY BLOCK – if required by lender or recording office]

EXHIBIT A

(Depiction of Premises/Legal Description)

[Attach scaled floor plan and legal description.]

Sources and References

• Mich. Comp. Laws § 600.2918
• Mich. Comp. Laws § 600.5701
• Mich. Comp. Laws § 600.5704
• Mich. Comp. Laws § 600.5714
• Mich. Comp. Laws § 600.5716
• Mich. Comp. Laws § 600.5718
• Mich. Comp. Laws § 600.5741
• Mich. Comp. Laws § 600.5744
• Mich. Comp. Laws § 554.134
• Mich. Comp. Laws § 211.1
• Mich. Comp. Laws § 408.1001
• Mich. Comp. Laws § 566.106
• Mich. Comp. Laws § 566.108
• Mich. Comp. Laws § 450.835
• Mich. Comp. Laws § 450.837
• 11 U.S.C. § 365
• 42 U.S.C. § 9601
• 42 U.S.C. § 12101
• 42 U.S.C. § 12182
• 42 U.S.C. § 12183