COMMERCIAL LEASE AGREEMENT
[Montana]
[// GUIDANCE: This template is drafted for use with commercial (non-residential) real property located in the State of Montana. Practitioners should tailor bracketed language, defined terms, business points, and statutory references to the facts of each transaction.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Demise, Term, and Possession
- Rent and Additional Charges
- Security Deposit
- Use of the Premises
- Repairs; Maintenance; Alterations
- Compliance With Laws; Environmental Matters
- Insurance
- Assignment and Subletting
- Estoppel; Subordination; Attornment
- Representations and Warranties
- Covenants
- Defaults and Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- 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 referred to herein individually as a “Party” and collectively as the “Parties.”
1.2 Premises.
Landlord is the fee simple owner of certain real property commonly known as [PROPERTY ADDRESS], more particularly described on Exhibit A attached hereto (the “Land”). Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the following (collectively, the “Premises”): (a) the Land, (b) all buildings, structures, improvements and appurtenances located thereon (the “Building”), and (c) all rights, privileges, easements, and appurtenances belonging thereto.
1.3 Consideration; Recitals.
The Parties enter into this Lease in consideration of the covenants, representations, warranties, and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.
1.4 Governing Jurisdiction.
This Lease, and any dispute arising hereunder, shall be governed by and construed in accordance with the laws of the State of Montana, without regard to its conflict-of-laws principles.
2. DEFINITIONS
For purposes of this Lease, the following capitalized terms shall have the meanings set forth below. Any term used and not defined herein shall have its common-law meaning.
“Additional Rent” – All sums (other than Base Rent) that Tenant is obligated to pay under this Lease, including but not limited to Operating Costs, Taxes, utilities, insurance premiums, and late charges.
“Base Rent” – The fixed rental amount set forth in Section 4.1, subject to adjustment as expressly provided herein.
“Business Day” – Any day other than Saturday, Sunday, or a day on which state-chartered banks in Montana are authorized or required to close.
“Commencement Date” – The date on which the Term commences pursuant to Section 3.2.
“Hazardous Material” – Any hazardous, toxic, or regulated substance, material, or waste as defined, listed, or regulated under any Environmental Law.
“Operating Costs” – All costs, expenses, and disbursements incurred by Landlord in owning, operating, maintaining, repairing, and managing the Premises, exclusive of Taxes.
“Permitted Use” – The use identified in Section 6.1.
“Term” – The duration of this Lease, commencing on the Commencement Date and expiring on the Expiration Date (each as defined in Section 3).
[// GUIDANCE: Add additional defined terms relevant to the transaction, ensuring each appears in alphabetical order.]
3. DEMISE, TERM, AND POSSESSION
3.1 Demise.
Subject to and in accordance with the terms of this Lease, Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord.
3.2 Term; Commencement and Expiration.
(a) The term of this Lease (the “Initial Term”) shall be [NUMBER] ([#]) years, commencing on the later of (i) [DATE], or (ii) the date Landlord delivers exclusive possession of the Premises to Tenant with Landlord’s Work (if any) substantially complete (the “Commencement Date”), and expiring at 11:59 p.m. local time on the last day of the month containing the [NUMBER]-year anniversary of the Commencement Date (the “Expiration Date”), unless earlier terminated or extended in accordance with this Lease.
(b) Option(s) to Extend. [OPTIONAL – insert renewal mechanics.]
(c) Holding Over. Any holding over after the Expiration Date shall constitute a tenancy-at-sufferance subject to a monthly rental equal to [150%–200%] of the last payable monthly Rent, subject to Landlord’s other rights and remedies under applicable Montana unlawful detainer statutes.
3.3 Delivery; Condition.
Tenant acknowledges that it has inspected the Premises and accepts the same [in their AS-IS, WHERE-IS condition / subject to Landlord’s Work described in Exhibit B], except as expressly set forth herein.
4. RENT AND ADDITIONAL CHARGES
4.1 Base Rent.
Tenant shall pay to Landlord, without offset or deduction, Base Rent in the following amounts:
• Lease Year 1: $[AMOUNT] per annum, payable in equal monthly installments of $[AMOUNT].
• Lease Year 2: [AMOUNT] …
[// GUIDANCE: Provide a rent schedule for the full Term, including annual escalations or CPI adjustments as negotiated.]
4.2 Additional Rent.
(a) Operating Costs. Tenant shall pay Tenant’s Proportionate Share (as defined in Exhibit C) of all Operating Costs within thirty (30) days after Landlord’s invoice.
(b) Taxes. Tenant shall pay all real property taxes, assessments, and similar governmental charges attributable to the Premises during the Term, subject to statutory proration.
(c) Utilities. Tenant shall promptly pay all charges for utilities and services furnished to the Premises.
4.3 Late Charge; Interest.
Any payment not received within five (5) Business Days after due shall accrue a late charge of [____]% of the overdue amount plus interest at the lesser of [____]% per annum or the maximum rate permitted by law.
4.4 Net Lease; Absolute Obligation.
This Lease is intended to be a triple-net lease; Base Rent and Additional Rent shall be absolutely net to Landlord.
5. SECURITY DEPOSIT
5.1 Amount; Form.
Upon execution of this Lease, Tenant shall deposit with Landlord the sum of $[AMOUNT] (the “Security Deposit”) as security for Tenant’s faithful performance of its obligations.
5.2 Application; Restoration.
Landlord may, without prejudice to any remedy, apply any portion of the Security Deposit to cure any Event of Default. Tenant shall promptly replenish any amounts so applied.
5.3 Return.
Provided no Event of Default exists, the unapplied balance of the Security Deposit shall be returned to Tenant within sixty (60) days after the later of (i) Expiration Date, or (ii) Tenant’s surrender of the Premises in the condition required hereby.
6. USE OF THE PREMISES
6.1 Permitted Use.
Tenant shall use the Premises solely for [SPECIFIC COMMERCIAL PURPOSE] and for no other purpose without Landlord’s prior written consent.
6.2 Prohibited Uses.
Tenant shall not (a) use or permit the Premises to be used for any unlawful purpose; (b) create waste or nuisance; (c) generate excessive noise, odors, or vibrations; or (d) conduct any auction, fire sale, or liquidation event on the Premises.
6.3 Compliance with Laws.
Tenant shall, at its sole cost, comply with all present and future federal, state, and local laws, statutes, ordinances, regulations, and rules applicable to the Premises or Tenant’s use thereof, including all accessibility, building code, zoning, and environmental requirements.
7. REPAIRS; MAINTENANCE; ALTERATIONS
7.1 Tenant’s Obligations.
Except as expressly provided in Section 7.2, Tenant shall, at its sole cost, keep and maintain the Premises and all building systems serving the Premises in good order, condition, and repair, including but not limited to structural components, roof, foundations, HVAC, plumbing, electrical, and loading areas.
[// GUIDANCE: Practitioners may shift structural obligations to Landlord for multi-tenant assets.]
7.2 Landlord’s Obligations.
Landlord shall repair any latent structural defects existing as of the Commencement Date, provided Tenant delivers written notice within one (1) year after Commencement Date.
7.3 Alterations.
(a) Tenant shall not make any alterations, improvements, or additions (“Alterations”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed for non-structural Alterations costing less than $[THRESHOLD].
(b) All Alterations shall be performed in a workmanlike manner, lien-free, in compliance with applicable laws, and using contractors approved by Landlord.
(c) All Alterations shall become Landlord’s property upon installation unless Landlord requires removal and restoration.
8. COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS
8.1 Environmental Compliance.
Tenant shall not cause or permit any Hazardous Material to be brought upon, stored, handled, or disposed of on or about the Premises, except in quantities customary for the Permitted Use and in compliance with all applicable environmental laws. Tenant shall, at its sole expense, (a) obtain all required permits; (b) conduct all operations in accordance with best environmental practices; and (c) promptly remediate any contamination caused by Tenant, its agents, employees, or invitees.
8.2 Environmental Indemnity.
Tenant shall indemnify, defend, and hold harmless Landlord and Landlord’s Indemnitees from and against any and all claims, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising from or related to the presence, release, or migration of Hazardous Material on, under, or about the Premises attributable to Tenant’s activities.
8.3 Environmental Inspections.
Landlord may, upon reasonable notice and during normal business hours, conduct environmental inspections or audits of the Premises no more than once per calendar year (unless a violation is found).
9. INSURANCE
9.1 Tenant’s Insurance.
Tenant shall, at its sole expense, maintain the following insurance throughout the Term:
(a) Commercial General Liability with limits of not less than $[_____] per occurrence and $[_____] aggregate;
(b) Property insurance on a special-form basis covering Tenant’s personal property and Alterations for full replacement cost;
(c) Workers’ compensation as required by law; and
(d) Business interruption insurance covering at least six (6) months of Rent.
9.2 Landlord’s Insurance.
Landlord shall maintain property insurance covering the Building (exclusive of Tenant’s property) against loss or damage by fire and other perils.
9.3 Insurance Policies.
All policies shall (a) name Landlord (and Landlord’s mortgagee, if any) as additional insured (for liability) and loss payee (for property); (b) be issued by insurers with an A.M. Best rating of at least A-VII; and (c) provide thirty (30) days’ prior written notice of cancellation or material modification.
10. ASSIGNMENT AND SUBLETTING
10.1 Consent Requirement.
Tenant shall not assign this Lease or sublet all or any portion of the Premises without Landlord’s prior written consent, which may be withheld in Landlord’s sole discretion; provided, however, that consent shall not be unreasonably withheld for (a) a sublease of not more than [25%] of the rentable square footage for the same Permitted Use, or (b) an assignment to an Affiliate (as defined below) that assumes all Tenant obligations.
10.2 Conditions to Consent.
As a condition to any assignment or sublease:
(a) Tenant shall deliver to Landlord at least thirty (30) days prior written notice;
(b) The assignee/subtenant shall execute Landlord’s standard consent agreement;
(c) Tenant shall remain fully liable; and
(d) Tenant shall reimburse Landlord for actual, reasonable legal and administrative costs (not to exceed $[CAP]).
10.3 Transfer Premium.
Any consideration paid to Tenant in connection with a Transfer in excess of the Rent due under this Lease (after deduction of Tenant’s reasonable out-of-pocket transfer costs) shall be paid [____]% to Landlord as Additional Rent.
10.4 Change of Control.
A direct or indirect change in the control of Tenant shall constitute an assignment requiring Landlord’s consent.
10.5 Prohibition on Assignment by Operation of Law.
Any assignment or sublease by operation of law (including through merger, consolidation, or sale of assets) shall be subject to this Section 10.
[// GUIDANCE: Montana common law permits assignment absent restriction; these provisions contractually override that default.]
11. ESTOPPEL; SUBORDINATION; ATTORNMENT
11.1 Estoppel Certificates.
Within ten (10) Business Days after request, Tenant shall execute and deliver an estoppel certificate confirming such factual matters regarding this Lease as Landlord may reasonably request.
11.2 Subordination; Non-Disturbance; Attornment.
This Lease is and shall be subordinate to any mortgage or deed of trust now or hereafter encumbering the Premises, provided that the mortgagee delivers a commercially reasonable non-disturbance agreement protecting Tenant’s rights under this Lease.
12. REPRESENTATIONS AND WARRANTIES
12.1 Landlord’s Representations.
Landlord represents and warrants to Tenant that:
(a) Landlord has full power and authority to execute and perform this Lease;
(b) The execution of this Lease has been duly authorized; and
(c) As of the Effective Date, Landlord has not received written notice of any pending condemnation or zoning change that would materially impair Tenant’s intended use.
12.2 Tenant’s Representations.
Tenant represents and warrants to Landlord that:
(a) Tenant is duly organized, validly existing, and in good standing;
(b) Tenant has full power and authority to execute and perform this Lease; and
(c) Tenant’s intended use complies with all applicable zoning and other legal requirements.
12.3 Survival.
The representations and warranties contained in this Section shall survive the execution of this Lease.
13. COVENANTS
13.1 Affirmative Covenants of Tenant.
Tenant shall:
(a) Promptly pay all Rent and other charges;
(b) Maintain the Premises in accordance with Section 7;
(c) Maintain all required insurance; and
(d) Deliver to Landlord copies of all governmental notices received relating to the Premises.
13.2 Negative Covenants of Tenant.
Tenant shall not:
(a) Place any lien or encumbrance upon the Premises;
(b) Use the Premises in any manner that increases insurance premiums; or
(c) Use the Premises for any purpose other than the Permitted Use.
13.3 Mechanic’s Liens.
Tenant shall promptly discharge any mechanic’s or materialman’s lien arising from work performed on the Premises by or on behalf of Tenant.
14. DEFAULTS AND REMEDIES
14.1 Events of Default.
Each of the following shall constitute an “Event of Default”:
(a) Failure to pay Rent within five (5) days after written notice;
(b) Failure to observe any non-monetary covenant within thirty (30) days after written notice, provided such cure period shall be extended if cure requires more than thirty (30) days and Tenant promptly commences and diligently pursues cure;
(c) Abandonment or vacation of the Premises;
(d) Material misrepresentation in any document delivered to Landlord;
(e) Insolvency, assignment for benefit of creditors, or commencement of bankruptcy proceedings.
14.2 Landlord’s Remedies.
Upon occurrence of an Event of Default, Landlord may, subject to Montana commercial eviction procedures:
(a) Terminate this Lease and recover possession;
(b) Accelerate all Rent due for the balance of the Term, discounted to present value at [____]%;
(c) Re-enter and relet the Premises, with or without termination, crediting net proceeds against Tenant’s obligations;
(d) Seek injunctive relief, including but not limited to eviction, without posting bond to the extent permitted by law; and
(e) Recover all costs of enforcement, including reasonable attorneys’ fees.
14.3 Landlord’s Lien.
Landlord is hereby granted a contractual lien and security interest in Tenant’s trade fixtures, inventory, and equipment located on the Premises, enforceable in accordance with Article 9 of the Uniform Commercial Code as adopted in Montana.
14.4 Mitigation.
Landlord shall use commercially reasonable efforts to mitigate its damages upon Tenant’s default.
15. RISK ALLOCATION
15.1 Indemnification by Tenant.
Tenant shall indemnify, defend, and hold harmless Landlord, its affiliates, and their respective officers, directors, members, managers, employees, and agents (“Landlord’s Indemnitees”) from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ 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 Tenant’s agents, employees, contractors, or invitees; or
(d) Any breach of this Lease by Tenant.
15.2 Indemnification by Landlord.
Landlord shall indemnify, defend, and hold harmless Tenant and Tenant’s Indemnitees from and against claims arising from Landlord’s gross negligence or willful misconduct.
15.3 Limitation of Liability.
Except for (a) indemnification obligations hereunder, (b) fraud, gross negligence, or willful misconduct, and (c) Tenant’s obligation to pay Rent, each Party’s aggregate liability for damages under this Lease shall not exceed [CAP OR “NO CAP”].
15.4 Waiver of Consequential Damages.
Neither Party shall be liable for consequential, special, or punitive damages (including lost profits) except to the extent arising from a Party’s fraud or intentional misconduct.
15.5 Force Majeure.
Neither Party shall be liable for failure to perform due to events beyond its reasonable control, including acts of God, war, terrorism, pandemic, labor disputes, governmental orders, or shortages of materials; provided, however, that lack of funds shall not constitute force majeure.
16. DISPUTE RESOLUTION
16.1 Governing Law.
This Lease shall be governed by the internal laws of the State of Montana.
16.2 Forum Selection.
Each Party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], Montana, for any action or proceeding arising out of or relating to this Lease.
16.3 Arbitration (Optional).
At either Party’s election made by written notice within thirty (30) days after service of a complaint, any dispute shall be resolved by binding arbitration administered by [AAA/JAMS] in accordance with its commercial rules. Judgment on the award may be entered in any court having jurisdiction. The arbitration shall be held in [CITY, MONTANA], before a single arbitrator who is a licensed Montana attorney with at least ten (10) years’ commercial real estate experience. Each Party shall bear its own attorneys’ fees, and the arbitrator may award fees to the prevailing Party.
16.4 Jury Trial Waiver (Optional).
EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF THIS LEASE.
16.5 Injunctive Relief; Eviction.
Notwithstanding anything to the contrary, Landlord shall be entitled to seek immediate equitable relief, including eviction and injunction, to enforce Tenant’s obligation to vacate the Premises or prevent irreparable harm, without posting bond to the extent permitted by law.
17. GENERAL PROVISIONS
17.1 Notices.
All notices shall be in writing and deemed given (a) when delivered personally, (b) one (1) Business Day after deposit with a nationally recognized overnight carrier, or (c) three (3) Business Days after deposit in U.S. certified mail, postage prepaid, return receipt requested, addressed to the Parties at the addresses set forth below (or such other address as either Party may designate).
17.2 Amendment; Waiver.
No amendment or waiver shall be effective unless in writing and signed by authorized representatives of both Parties. Waiver of any breach shall not be deemed waiver of any other or subsequent breach.
17.3 Successors and Assigns.
This Lease shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.
17.4 Severability.
If any provision is held invalid or unenforceable, the remainder of this Lease shall not be affected, and the invalid provision shall be deemed modified to the minimum extent necessary to render it valid.
17.5 Integration.
This Lease, together with all exhibits and addenda, constitutes the entire agreement of the Parties and supersedes all prior or contemporaneous understandings, whether written or oral.
17.6 Counterparts; Electronic Signatures.
This Lease may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures delivered by electronic means (e.g., PDF or DocuSign) shall be deemed original signatures.
17.7 Confidentiality.
The Parties shall keep the terms of this Lease confidential, except as required by law or to their respective lenders, investors, accountants, and attorneys bound by similar confidentiality obligations.
17.8 No Recordation.
Tenant shall not record this Lease; however, either Party may record a short-form memorandum of lease in form reasonably acceptable to both Parties.
18. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have caused this Lease to be executed and delivered as of the Effective Date first above written.
LANDLORD:
[LANDLORD LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
TENANT:
[TENANT LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
[Notary Block – if required under Montana law for recordable memoranda.]
EXHIBIT A – LEGAL DESCRIPTION
[Insert metes-and-bounds or subdivision description.]
EXHIBIT B – LANDLORD’S WORK (if any)
EXHIBIT C – OPERATING COST ALLOCATION; TENANT’S PROPORTIONATE SHARE
[// GUIDANCE: Confirm that any referenced Montana statutes (e.g., unlawful detainer procedures) remain current at the time of finalization. Consider layering in industry-specific provisions (e.g., healthcare, cannabis, manufacturing) where the Permitted Use implicates heightened regulatory concerns. Delete optional clauses (arbitration, jury waiver) if the Parties elect not to include them. This template intentionally allocates most maintenance obligations to Tenant (typical for single-tenant triple-net leases); adjust Section 7 based on asset type and leasing market norms.]