COMMERCIAL LEASE AGREEMENT
(New Jersey – Court-Ready Template)
[// GUIDANCE: This template is intentionally comprehensive. Delete any bracketed guidance comments and fill all placeholders before final execution.]
TABLE OF CONTENTS
- Definitions
- Premises; Term
- Base Rent; Additional Rent; Payment Mechanics
- Permitted Use; Legal Compliance
- Maintenance, Repairs & Alterations
- Assignment & Subletting
- Environmental Matters
- Insurance
- Indemnification; Limitation of Liability
- Taxes; Utilities; Operating Expenses
- Default; Remedies
- Casualty; Condemnation
- Security Deposit
- Estoppel; Financial Reporting
- Quiet Enjoyment
- Surrender; Holding Over
- Dispute Resolution; Governing Law
- General Provisions
- Execution Block
1. DEFINITIONS
The following terms have the meanings set forth below and apply throughout this Lease:
“Additional Rent” – Any monetary obligation of Tenant other than Base Rent, including without limitation Taxes, Operating Expenses, Late Charges, and any other sums owing under this Lease.
“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.
“Base Rent” – The fixed rent payable pursuant to §3.1.
“Building” – The structure(s) located at the Property.
“Commencement Date” – [COMMENCEMENT DATE].
“Environmental Laws” – Collectively, 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.; the New Jersey Spill Compensation and Control Act, N.J. Stat. Ann. § 58:10-23.11 et seq.; the Industrial Site Recovery Act (“ISRA”), N.J. Stat. Ann. § 13:1K-6 et seq.; and any similar federal, state, or local statutes, regulations, or ordinances governing Hazardous Materials.
“Event of Default” – Any occurrence described in §11.1.
“Expiration Date” – [EXPIRATION DATE], unless earlier terminated in accordance with this Lease.
“Hazardous Materials” – Any substance, waste, or material classified or regulated as hazardous or toxic under Environmental Laws, including petroleum products.
“Land” – The parcel(s) more particularly described in Exhibit A.
“Landlord” – [LANDLORD LEGAL NAME], a [STATE & ENTITY TYPE].
“Lease Year” – Each 12-month period commencing on the Commencement Date, and each anniversary thereof.
“Operating Expenses” – Expenses incurred by Landlord as described in §10.3.
“Parties” – Collectively, Landlord and Tenant.
“Premises” – Approximately [SQUARE FEET] rentable square feet within the Building, outlined on the floor plan attached as Exhibit B.
“Property” – The Land, Building, common areas, parking areas, fixtures, and appurtenances.
“Security Deposit” – The amount described in §13.1.
“Tenant” – [TENANT LEGAL NAME], a [STATE & ENTITY TYPE].
“Term” – The period beginning on the Commencement Date and ending on the Expiration Date, subject to earlier termination or extension in accordance with this Lease.
2. PREMISES; TERM
2.1 Demise. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, together with the non-exclusive right to use the common areas of the Property, upon the terms and conditions herein.
2.2 Term; Commencement. The Term shall commence on the Commencement Date and expire on the Expiration Date. Promptly after determination of the actual Commencement Date, Landlord may prepare, and Tenant shall execute, a Commencement Date Memorandum in the form of Exhibit C.
2.3 Option(s) to Extend. [// GUIDANCE: Insert details or delete.]
3. BASE RENT; ADDITIONAL RENT; PAYMENT MECHANICS
3.1 Base Rent. Tenant shall pay to Landlord Base Rent in the following amounts:
• Lease Year 1: $[AMOUNT] per annum, payable in equal monthly installments of $[AMOUNT];
• [ADD ADDITIONAL LEASE YEARS].
Base Rent shall be due on or before the first (1st) day of each calendar month.
3.2 Additional Rent. All sums other than Base Rent that Tenant is obligated to pay constitute Additional Rent and shall be due within ten (10) days after Landlord’s invoice unless a different time is expressly provided.
3.3 Late Charge; Interest. Any Rent not received within five (5) days after due is subject to (a) a late charge of five percent (5%) of the overdue amount, and (b) interest at the lesser of ten percent (10%) per annum or the maximum rate permitted by law from the due date until paid.
3.4 Manner of Payment. Rent shall be paid by electronic funds transfer to the account designated by Landlord or at such other place Landlord may designate in writing.
4. PERMITTED USE; LEGAL COMPLIANCE
4.1 Permitted Use. Tenant shall use the Premises solely for [DESCRIBE PERMITTED USE] and for no other purpose without Landlord’s prior written consent.
4.2 Compliance with Laws. Tenant, at its sole cost, shall comply with all applicable federal, state, and local laws, ordinances, regulations, and requirements (collectively, “Laws”) relating to (a) Tenant’s use and occupancy of the Premises, (b) the conduct of Tenant’s business therein, and (c) any Alterations made by Tenant.
4.3 Prohibited Uses. Tenant shall not (a) permit any waste or nuisance, (b) place any load upon the floors exceeding design loads, or (c) use the Premises for any unlawful purpose.
5. MAINTENANCE, REPAIRS & ALTERATIONS
5.1 Landlord Obligations. Landlord shall maintain the structural components of the Building, roof, foundation, exterior walls (excluding doors, windows, and glass), and Building systems serving common areas in good repair, reasonable wear and tear excepted.
5.2 Tenant Obligations. Tenant, at its sole cost, shall maintain and repair the interior, non-structural portions of the Premises, including without limitation doors, windows, interior walls, floor coverings, lighting, and any Alterations.
5.3 Alterations. Except for cosmetic improvements costing less than $[THRESHOLD], Tenant shall not make any Alterations without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. All Alterations shall be performed (a) in a good and workmanlike manner, (b) in compliance with all Laws, and (c) using contractors reasonably approved by Landlord.
5.4 Removal; Restoration. Landlord may require Tenant, at expiration or earlier termination, to remove any Alterations and restore the Premises to a broom-clean, good condition, reasonable wear and tear excepted.
6. ASSIGNMENT & SUBLETTING
6.1 Restriction. Tenant shall not assign this Lease or sublet all or any portion of the Premises (each, a “Transfer”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed.
6.2 Notice; Information. Tenant shall give Landlord at least thirty (30) days’ prior written notice of any proposed Transfer, together with (a) the identity and credit information of the proposed transferee, (b) the material terms of the Transfer, and (c) such other information as Landlord may reasonably request.
6.3 Recapture Right. Within fifteen (15) days after receiving Tenant’s Transfer notice, Landlord may elect to recapture the affected space by written notice to Tenant, whereupon this Lease shall terminate with respect to such space as of the effective date of the proposed Transfer.
6.4 Assignment to Affiliate. Notwithstanding §6.1, Tenant may, upon thirty (30) days’ prior written notice, assign this Lease or sublet the Premises to an Affiliate provided (a) the Affiliate assumes all Tenant obligations, and (b) Tenant remains primarily liable hereunder.
6.5 Transfer Consideration. Tenant shall pay Landlord fifty percent (50%) of any Transfer Premium (as defined below) within ten (10) days after receipt. “Transfer Premium” means any consideration received by Tenant in excess of the Rent allocable to the transferred space, less reasonable brokerage commissions and tenant improvement costs actually paid.
7. ENVIRONMENTAL MATTERS
7.1 Tenant Covenants. Tenant shall (a) comply with all Environmental Laws; (b) not cause or permit any Hazardous Materials to be generated, used, treated, stored, or disposed of on the Property, except for de minimis quantities customarily used in Tenant’s business, which shall be handled in compliance with Environmental Laws; and (c) immediately notify Landlord of any release of Hazardous Materials or any notice of violation received by Tenant.
7.2 Environmental Indemnity. Tenant shall indemnify, defend, and hold harmless Landlord and its Affiliates from and against any and all claims, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of (a) Tenant’s breach of §7 or (b) the presence, release, or migration of Hazardous Materials caused or permitted by Tenant.
7.3 ISRA Compliance. Tenant shall promptly furnish any information required under ISRA in connection with Tenant’s operations and shall, at its sole cost, comply with all ISRA obligations triggered by (a) Tenant’s cessation of operations, (b) a Transfer, or (c) the expiration or earlier termination of this Lease.
7.4 Baseline Environmental Assessment. [// GUIDANCE: Insert if the Parties desire a pre-occupancy environmental review to allocate clean-up responsibility.]
8. INSURANCE
8.1 Tenant Insurance. Tenant shall, at its sole cost, maintain during the Term:
a) Commercial General Liability insurance with limits of not less than $[LIMIT] per occurrence and $[LIMIT] aggregate;
b) Property insurance covering Tenant’s personal property and Alterations on an “all-risk” basis at full replacement cost;
c) Workers’ Compensation as required by law and Employer’s Liability with a $[LIMIT] limit; and
d) Business interruption insurance covering at least twelve (12) months of Rent.
8.2 Landlord Insurance. Landlord shall maintain (a) property insurance on the Building (excluding Tenant’s property) at replacement cost and (b) liability insurance customary for similar properties. Landlord may include Operating Expenses for such insurance.
8.3 Waiver of Subrogation. Each Party shall cause its insurers to waive subrogation rights against the other Party to the extent permitted by law.
8.4 Certificates. Prior to the Commencement Date and upon each renewal, Tenant shall deliver certificates evidencing the required coverages, listing Landlord and its mortgagee(s) as additional insureds (CGL) and loss payees (property).
9. INDEMNIFICATION; LIMITATION OF LIABILITY
9.1 Tenant Indemnity. To the fullest extent permitted by law, Tenant shall indemnify, defend, and hold harmless Landlord and its Affiliates from and against any and all claims, damages, losses, liabilities, and expenses (including reasonable attorneys’ fees) arising out of (a) Tenant’s use or occupancy of the Premises, (b) the conduct of Tenant’s business, (c) any act, omission, or negligence of Tenant, its employees, agents, contractors, or invitees, or (d) Tenant’s breach of this Lease.
9.2 Landlord Indemnity. Landlord shall indemnify Tenant for losses arising from Landlord’s gross negligence or willful misconduct.
9.3 Limitation of Liability. EXCEPT FOR (a) CLAIMS ARISING FROM A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (b) INDEMNIFICATION OBLIGATIONS, OR (c) BREACHES OF CONFIDENTIALITY OR ENVIRONMENTAL OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR PUNITIVE DAMAGES. Landlord’s aggregate liability under this Lease shall not exceed $[CAP AMOUNT] in the aggregate. [// GUIDANCE: Insert “N/A” if no liability cap is desired.]
10. TAXES; UTILITIES; OPERATING EXPENSES
10.1 Real Estate Taxes. Tenant shall pay Tenant’s Pro Rata Share of real estate taxes levied against the Property (“Taxes”) within thirty (30) days after Landlord’s invoice.
10.2 Utilities. Tenant shall be solely responsible for all utilities consumed in the Premises, including electricity, gas, water, sewer, and telecommunications.
10.3 Operating Expenses. Tenant shall pay Tenant’s Pro Rata Share of Operating Expenses, defined as all costs of operating, maintaining, repairing, and managing the Property, excluding capital expenditures except to the extent amortized over their useful life.
11. DEFAULT; REMEDIES
11.1 Events of Default. Each of the following constitutes an Event of Default:
a) Non-payment of Rent within five (5) days after written notice;
b) Tenant’s failure to perform any non-monetary obligation within thirty (30) days after written notice (or such longer period as reasonably required if Tenant commences cure within such 30-day period and diligently prosecutes the same);
c) Tenant’s abandonment or vacating of the Premises;
d) Tenant’s bankruptcy or insolvency;
e) Any material misrepresentation by Tenant in connection with this Lease.
11.2 Remedies. Upon an Event of Default, Landlord may exercise any and all remedies available at law or in equity, including without limitation:
a) Termination of this Lease and possession of the Premises;
b) Summary dispossess proceedings pursuant to N.J. Stat. Ann. § 2A:18-53 et seq.;
c) Recovery of all Rent and damages, including prospective Rent for the balance of the Term, discounted to present value;
d) Landlord self-help to cure Tenant’s defaults at Tenant’s expense; and
e) Injunctive or other equitable relief.
11.3 Attorneys’ Fees. Tenant shall pay Landlord’s reasonable attorneys’ fees and costs incurred in enforcing this Lease or in any eviction proceeding.
11.4 Grace & Cure Periods. No grace or cure period applies to habitual late payment (defined as three (3) or more late payments in any twelve-month period).
12. CASUALTY; CONDEMNATION
12.1 Casualty. If the Premises are damaged by fire or other casualty, Landlord shall, subject to insurance proceeds, repair the damage within a reasonable time. Rent shall abate proportionately to the unusable portion of the Premises. If restoration is reasonably estimated to exceed one hundred eighty (180) days or insurance proceeds are unavailable, either Party may terminate this Lease by notice within thirty (30) days after such estimate.
12.2 Condemnation. If all or a material part of the Premises is taken by eminent domain, this Lease shall terminate as of the taking date, and Rent shall be apportioned. Award proceeds belong to Landlord, except Tenant may seek compensation for relocation costs and trade fixtures.
13. SECURITY DEPOSIT
13.1 Amount; Form. Upon execution, Tenant shall deposit with Landlord the Security Deposit of $[AMOUNT], held as security for Tenant’s faithful performance.
13.2 Application. Landlord may apply the Security Deposit to cure any Tenant default. Tenant shall replenish the Security Deposit within ten (10) days after notice.
13.3 Return. Within thirty (30) days after the later of (a) expiration or termination of the Lease and (b) Tenant’s surrender of the Premises, Landlord shall return the unapplied balance without interest.
14. ESTOPPEL; FINANCIAL REPORTING
14.1 Estoppel Certificates. Within ten (10) business days after written request, Tenant shall execute and deliver an estoppel certificate in the form reasonably requested by Landlord or its lender.
14.2 Financial Statements. Upon request not more than once per fiscal year (unless an Event of Default exists), Tenant shall furnish its most recent audited (or if unavailable, reviewed) financial statements.
15. QUIET ENJOYMENT
Provided Tenant is not in default, Tenant may quietly enjoy the Premises without disturbance by Landlord or anyone claiming through Landlord, subject to the terms of this Lease and any mortgages of record.
16. SURRENDER; HOLDING OVER
16.1 Surrender. On the Expiration Date or earlier termination, Tenant shall surrender the Premises broom-clean and in good order, ordinary wear and tear excepted.
16.2 Holding Over. Any holdover without Landlord’s written consent shall be a tenancy at sufferance, subject to (a) Base Rent equal to 150% of the then-current Rent for the first thirty (30) days and 200% thereafter, and (b) all other terms of this Lease.
17. DISPUTE RESOLUTION; GOVERNING LAW
17.1 Governing Law. This Lease shall be governed by the real estate laws of the State of New Jersey without regard to conflicts-of-law principles.
17.2 Forum Selection. Each Party consents to the exclusive jurisdiction of the state courts located in [COUNTY], New Jersey.
17.3 Arbitration. [OPTIONAL – STRIKE IF NOT USED] Any dispute arising under this Lease shall, at the election of either Party, be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
17.4 Jury Trial Waiver. [OPTIONAL – STRIKE IF NOT USED] EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION RELATING TO THIS LEASE.
17.5 Injunctive Relief. Notwithstanding §17.3, Landlord may seek immediate injunctive or other equitable relief (including eviction) in accordance with §11.2.
18. GENERAL PROVISIONS
18.1 Amendments; Waivers. No amendment or waiver is effective unless in writing and signed by the Party against whom enforcement is sought.
18.2 Notices. All notices must be in writing and delivered (a) by hand, (b) by nationally-recognized overnight courier, or (c) by certified mail, return receipt requested, to the addresses set forth below (or as later designated), and deemed given upon receipt or refusal.
18.3 Successors & Assigns. This Lease binds and benefits the Parties and their permitted successors and assigns.
18.4 Severability. Any unenforceable provision shall be re-interpreted to effect its intent to the maximum extent lawful, and the remainder of the Lease shall continue in full force.
18.5 Integration. This Lease, together with all Exhibits, constitutes the entire agreement of the Parties and supersedes all prior understandings.
18.6 Force Majeure. Neither Party is liable for failure to perform due to events beyond its reasonable control, excluding payment obligations.
18.7 Counterparts; Electronic Signatures. This Lease may be executed in multiple counterparts, each of which is deemed an original. Signatures delivered by electronic means (e.g., PDF, DocuSign) are binding.
18.8 Interpretation. Headings are for convenience only and do not affect interpretation. “Including” means “including without limitation.”
18.9 No Partnership. Nothing herein creates any partnership, joint venture, or agency relationship between the Parties.
19. 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: _________
[Corporate Acknowledgment / Notary Block as required under N.J. law]
EXHIBITS
Exhibit A – Legal Description of Land
Exhibit B – Floor Plan / Premises Outline
Exhibit C – Commencement Date Memorandum
Exhibit D – Rules & Regulations
[Add additional exhibits as needed]
[// GUIDANCE: Review NJ Municipal code for any local certificate of occupancy or business license prerequisites specific to the Property’s municipality. Insert supplemental rider provisions (e.g., shopping-center CAM formulas, HVAC maintenance, generator fuel requirements) as warranted by the transaction.]