COMMERCIAL LEASE AGREEMENT
(New Mexico)
[// GUIDANCE: This template is drafted for a single-tenant, triple-net (NNN) commercial lease of real property located in the State of New Mexico. All bracketed items must be reviewed and customized to reflect the negotiated business deal. Remove all guidance comments prior to execution.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Lease Grant & Premises
- Term & Possession
- Rent & Additional Rent
- Use of Premises; Environmental Matters
- Tenant Improvements & Alterations
- Maintenance, Repairs & Utilities
- Insurance
- Taxes & Assessments
- Assignment & Subletting
- Compliance with Laws
- Representations & Warranties
- Covenants
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
THIS COMMERCIAL LEASE AGREEMENT (“Lease”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
- “[LANDLORD LEGAL NAME],” a [STATE AND TYPE OF ENTITY] (“Landlord”); and
- “[TENANT LEGAL NAME],” a [STATE AND TYPE OF ENTITY] (“Tenant”).
Landlord and Tenant are sometimes referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Landlord is the fee simple owner of certain real property located at [PROPERTY ADDRESS], State of New Mexico, together with all improvements thereon (the “Property”).
B. Tenant desires to lease from Landlord, and Landlord desires to lease to Tenant, a portion of the Property described herein, upon the terms and conditions set forth below.
C. Consideration for this Lease includes the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants herein, the Parties agree as follows:
2. DEFINITIONS
[// GUIDANCE: Defined terms are capitalized throughout the Lease.]
2.1 “Additional Rent” means all amounts payable by Tenant other than Base Rent, including but not limited to Taxes, insurance costs, utilities, and any other reimbursable expenses.
2.2 “Base Rent” means the fixed rental payments set forth in Section 5.1.
2.3 “Building” means the structure located on the Property commonly known as [BUILDING NAME OR NUMBER].
2.4 “Commencement Date” has the meaning given in Section 4.1.
2.5 “Environmental Laws” means all federal, state, and local statutes, regulations, ordinances, and common-law duties relating to protection of health, safety, or the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.).
2.6 “Event of Default” has the meaning set forth in Section 15.1.
2.7 “Force Majeure” has the meaning set forth in Section 16.4.
2.8 “Hazardous Material” means any substance regulated under Environmental Laws, including petroleum products.
2.9 “Lease Term” has the meaning set forth in Section 4.1.
2.10 “Leased Premises” means approximately [SQUARE FOOTAGE] rentable square feet of the Building, more particularly depicted on Exhibit A.
2.11 “Permitted Use” means the use specified in Section 6.1.
3. LEASE GRANT & PREMISES
3.1 Lease Grant. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Leased Premises, together with the non-exclusive right to use all common areas appurtenant thereto, subject to the terms and conditions of this Lease.
3.2 Condition of Premises. Tenant accepts the Leased Premises in “AS-IS” condition as of the Commencement Date, except as expressly provided in Exhibit B (Landlord Work) or Section 7.
4. TERM & POSSESSION
4.1 Lease Term. The term of this Lease (the “Lease Term”) shall commence on the earlier of (a) [DATE CERTAIN] or (b) the date Tenant first conducts business in the Leased Premises (the “Commencement Date”) and shall continue for [NUMBER] years thereafter, unless sooner terminated in accordance with this Lease.
4.2 Option to Renew. Tenant shall have [NUMBER] option(s) to renew the Lease Term for successive periods of [LENGTH] each (each, a “Renewal Term”) upon not less than [NOTICE PERIOD] written notice to Landlord, on the terms set forth in Exhibit C.
5. RENT & ADDITIONAL RENT
5.1 Base Rent. Tenant shall pay to Landlord Base Rent in the amount of [AMOUNT] per month, payable in advance on or before the first day of each calendar month during the Lease Term and any Renewal Term, subject to annual escalations of [PERCENTAGE OR INDEX] beginning on the first anniversary of the Commencement Date.
5.2 Additional Rent. Tenant shall pay Additional Rent as set forth in Sections 8, 9, and 10. Base Rent and Additional Rent are collectively referred to as “Rent.”
5.3 Late Charge & Interest. If any Rent is not received within [GRACE PERIOD] days after due, Tenant shall pay (a) a late fee equal to [LATE FEE AMOUNT OR PERCENTAGE] and (b) interest at the lesser of [INTEREST RATE]% per annum or the maximum rate permitted by law.
5.4 Net Lease. This Lease is intended to be a triple-net lease; except as expressly provided herein, Tenant shall bear all costs and expenses related to the Leased Premises and Tenant’s operations thereon.
6. USE OF PREMISES; ENVIRONMENTAL MATTERS
6.1 Permitted Use. Tenant shall use the Leased Premises solely for [SPECIFY BUSINESS PURPOSE] and for no other purpose without Landlord’s prior written consent.
6.2 Compliance with Laws. Tenant shall comply at its sole cost with all applicable federal, state, and local laws, ordinances, regulations, and orders, including zoning, building codes, and Environmental Laws.
6.3 Environmental Compliance.
(a) Tenant shall not cause or permit any Hazardous Material to be generated, used, stored, released, or disposed of on, under, or about the Property, except in de minimis quantities customarily used in Tenant’s business and in compliance with Environmental Laws.
(b) Tenant shall promptly notify Landlord of any actual or suspected release of Hazardous Material and shall take all actions required under Environmental Laws to clean up, remediate, and mitigate any contamination.
(c) Tenant shall provide Landlord, upon request, with copies of all environmental permits, reports, and correspondence with governmental authorities relating to the Leased Premises.
(d) Landlord reserves the right to conduct, at its expense (unless contamination is caused by Tenant), environmental audits not more than once per Lease Year.
6.4 Sustainability Initiatives. Tenant shall cooperate with any reasonable building-wide sustainability or energy-efficiency programs implemented by Landlord, provided such programs do not materially increase Tenant’s costs without Tenant’s consent.
7. TENANT IMPROVEMENTS & ALTERATIONS
7.1 Landlord Work. Landlord shall perform the work described in Exhibit B, if any, at Landlord’s cost. Landlord shall deliver the Leased Premises in broom-clean condition with all Building systems in good working order.
7.2 Tenant Improvements. Any initial improvements or build-out by Tenant shall be performed in accordance with plans approved by Landlord and shall comply with all applicable laws. Unless otherwise agreed, Tenant shall bear all costs of Tenant Improvements.
7.3 Alterations. After Commencement, Tenant shall not make any Alterations to the Leased Premises without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Structural or exterior Alterations may be withheld in Landlord’s sole discretion.
7.4 Removal & Restoration. Prior to expiration or earlier termination, Tenant shall remove any trade fixtures and personal property and restore any damage caused by such removal. Landlord may require Tenant to remove Alterations unless Landlord elects, at its sole option, to accept them.
8. MAINTENANCE, REPAIRS & UTILITIES
8.1 Tenant Obligations. Tenant, at its sole cost, shall maintain the Leased Premises in good order and condition, including routine maintenance of HVAC systems, plumbing, and electrical systems exclusively serving the Leased Premises.
8.2 Landlord Obligations. Landlord shall maintain the structural elements of the Building (foundation, roof, exterior walls, and load-bearing elements) unless damage is caused by Tenant, in which case Tenant shall bear the cost.
8.3 Utilities. Tenant shall timely pay all utility charges serving the Leased Premises. If utilities are not separately metered, Tenant shall pay its proportionate share as reasonably determined by Landlord.
9. INSURANCE
9.1 Tenant Insurance. Tenant shall maintain, at its expense:
(a) Commercial General Liability insurance with limits not less than $[LIMIT] per occurrence and $[LIMIT] aggregate, naming Landlord and any mortgagee as additional insureds;
(b) Property insurance on Tenant’s personal property and improvements, written on a replacement-cost basis;
(c) Workers’ compensation insurance as required by law; and
(d) Business interruption insurance for not less than [NUMBER] months of Rent.
9.2 Landlord Insurance. Landlord shall insure the Building against fire and other perils in an amount at least equal to 100% of replacement cost.
9.3 Waiver of Subrogation. Each Party waives, and shall obtain from its insurers a waiver of, all rights of subrogation against the other Party to the extent of covered losses.
10. TAXES & ASSESSMENTS
10.1 Real Estate Taxes. Tenant shall pay, as Additional Rent, all real property taxes, assessments, and governmental charges (collectively, “Taxes”) levied against the Property for each tax year falling within the Lease Term. Taxes may be billed to Tenant directly by the taxing authority or reimbursed to Landlord within [DAYS] days after Landlord’s invoice.
10.2 Contest. Tenant may, at its sole expense and after notice to Landlord, contest any Taxes, provided the contest does not subject the Property to risk of forfeiture or penalty.
11. ASSIGNMENT & SUBLETTING
11.1 Restriction. Tenant shall not assign this Lease or sublet all or any part of the Leased Premises (each, a “Transfer”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.
11.2 Permitted Transfers. Notwithstanding Section 11.1, Tenant may, upon [NOTICE PERIOD] days’ prior written notice to Landlord, assign this Lease or sublet the Leased Premises to (a) an Affiliate of Tenant, (b) a successor by merger or consolidation, or (c) a purchaser of substantially all of Tenant’s assets, provided the transferee has a net worth at least equal to that of Tenant on the Effective Date.
11.3 Transfer Consideration. If Tenant receives consideration in excess of Rent in connection with a Transfer, 50% of the net excess shall be paid to Landlord as Additional Rent promptly upon receipt.
11.4 No Release. Unless expressly agreed in writing, no Transfer shall relieve Tenant of its obligations under this Lease.
[// GUIDANCE: New Mexico generally enforces commercially reasonable restrictions on assignment/subletting; the above provisions are designed to be enforceable in NM.]
12. COMPLIANCE WITH LAWS
12.1 Legal Requirements. Tenant shall, at its expense, comply with all applicable laws, ordinances, rules, and regulations relating to the Premises or Tenant’s use thereof, including OSHA, ADA (to the extent applicable), and Environmental Laws.
12.2 Americans with Disabilities Act. Responsibility for initial ADA compliance is allocated in Exhibit B. Ongoing compliance for Tenant’s use or Alterations shall be Tenant’s responsibility.
13. REPRESENTATIONS & WARRANTIES
13.1 Mutual Representations. 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;
(b) It has full power and authority to execute and perform this Lease; and
(c) The individual executing this Lease on its behalf has been duly authorized to do so.
13.2 Landlord Representations. Landlord further represents that:
(a) It holds good and marketable title to the Property free of any liens that would interfere with Tenant’s use; and
(b) As of the Effective Date, Landlord has received no written notice of any violation of law affecting the Property that has not been cured.
13.3 Survival. The representations and warranties in this Section shall survive the execution and delivery of this Lease.
14. COVENANTS
14.1 Quiet Enjoyment. Landlord covenants that Tenant shall peaceably and quietly enjoy the Leased Premises during the Lease Term, provided Tenant is not in default.
14.2 Estoppel Certificates. Within [DAYS] days after request, either Party shall execute and deliver an estoppel certificate in the form reasonably requested by the other Party or its lender.
14.3 Access Rights. Landlord and its agents may enter the Leased Premises upon [NOTICE PERIOD] hours’ notice (except in emergencies) to inspect, perform repairs, or show the Premises to prospective purchasers, lenders, or tenants.
14.4 Signage. Tenant may install signage consistent with Building standards and applicable municipal ordinances, subject to Landlord’s prior approval, not unreasonably withheld.
15. DEFAULT & REMEDIES
15.1 Events of Default. The occurrence of any of the following shall constitute an “Event of Default”:
(a) Failure to pay Rent within [CURE PERIOD FOR RENT] days after written notice;
(b) Failure to perform any other covenant within [CURE PERIOD] days after written notice (or, if the default cannot reasonably be cured within such period, failure to commence and diligently pursue cure);
(c) Abandonment or vacancy of the Premises for more than [DAYS];
(d) Insolvency, assignment for the benefit of creditors, or commencement of a bankruptcy proceeding by or against Tenant (unless dismissed within [TIME]); or
(e) Breach of the environmental covenants in Section 6.
15.2 Landlord Remedies. Upon an Event of Default, Landlord may, in any combination and without waiver of other rights:
(a) Accelerate all Rent due for the balance of the Lease Term, discounted to present value at [DISCOUNT RATE]%;
(b) Terminate Tenant’s right of possession and/or this Lease;
(c) Enter and repossess the Premises in compliance with New Mexico commercial eviction procedures and remove Tenant’s property;
(d) Re-let the Premises and recover the deficiency between Rent due and rent collected; and
(e) Recover reasonable attorneys’ fees, costs, and expenses.
15.3 Self-Help. If Tenant fails to perform any obligation within the applicable cure period, Landlord may perform such obligation on Tenant’s behalf and Tenant shall reimburse Landlord upon demand.
15.4 Mitigation. Landlord shall use commercially reasonable efforts to mitigate damages following an Event of Default.
[// GUIDANCE: Commercial evictions in NM require filing a forcible entry and detainer action in state court, with a minimum 3-day notice to quit if for non-payment. Modify notice periods to ensure statutory compliance.]
16. RISK ALLOCATION
16.1 Indemnification by Tenant. To the fullest extent permitted by law, Tenant shall indemnify, defend, and hold harmless Landlord, its affiliates, and their respective agents, from and against any and all claims, liabilities, losses, and expenses (including reasonable attorneys’ fees) arising from:
(a) Tenant’s use or occupancy of the Premises;
(b) Any act or omission of Tenant or Tenant’s agents, employees, contractors, or invitees; or
(c) Any breach of this Lease by Tenant.
The foregoing indemnity shall survive termination of this Lease.
16.2 Indemnification by Landlord. Landlord shall indemnify Tenant from and against claims arising from Landlord’s gross negligence or willful misconduct.
16.3 Limitation of Liability. Except for (i) Tenant’s indemnity obligations, (ii) liability for unpaid Rent, and (iii) damages caused by a Party’s gross negligence or willful misconduct, the liability of either Party shall not exceed [CAP AMOUNT] (the “Liability Cap”).
16.4 Force Majeure. Neither Party shall be liable for failure to perform due to causes beyond its reasonable control, including acts of God, war, terrorism, pandemic, labor disputes, or governmental orders, provided the affected Party gives prompt notice and resumes performance as soon as practicable.
17. DISPUTE RESOLUTION
17.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of New Mexico, without regard to conflicts of law principles.
17.2 Forum Selection. Each Party consents to exclusive jurisdiction of the state courts located in [COUNTY], New Mexico, for any suit arising under this Lease, subject to Section 17.3.
17.3 Arbitration (Optional). If the Parties so elect in writing, any dispute (other than actions for eviction, injunctive relief, or collection of Rent) shall be resolved by binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in [CITY], New Mexico, by a single arbitrator with at least ten (10) years of commercial real estate experience.
17.4 Jury Waiver (Optional). TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS LEASE.
17.5 Injunctive Relief. Nothing herein shall limit either Party’s right to seek provisional or injunctive relief, including eviction, in a court of competent jurisdiction to protect its interests pending resolution of the dispute.
18. GENERAL PROVISIONS
18.1 Amendments & Waivers. No amendment or waiver shall be effective unless in writing and signed by the Party to be bound. No waiver shall be deemed a continuing waiver of any subsequent breach.
18.2 Successors & Assigns. This Lease shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns.
18.3 Severability. If any provision is held invalid, the remainder of the Lease shall not be affected, and the invalid provision shall be replaced with a valid provision that most closely reflects the Parties’ intent.
18.4 Entire Agreement. This Lease (including exhibits) constitutes the entire agreement and supersedes all prior negotiations.
18.5 Counterparts; Electronic Signatures. This Lease may be executed in counterparts, each of which is deemed an original. Signatures delivered via electronic means (e.g., PDF, DocuSign) shall be effective.
18.6 Notices. All notices shall be in writing and delivered (a) personally, (b) by certified mail, return receipt requested, or (c) by nationally recognized overnight courier, to the addresses set forth below, or such other address as a Party may designate. Notices shall be deemed given upon receipt or refusal.
18.7 No Recording. Tenant shall not record this Lease; however, upon request of either Party, the Parties shall execute a short-form memorandum of lease suitable for recording, at Tenant’s cost.
19. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Lease as of the Effective Date.
LANDLORD:
[LANDLORD LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ________
TENANT:
[TENANT LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ________
[// GUIDANCE: Consider adding a notary acknowledgment if required by lender or for recording a memorandum of lease.]
EXHIBIT A
(Leased Premises Floor Plan)
EXHIBIT B
(Landlord Work / Initial Build-Out)
EXHIBIT C
(Renewal Term Economics)
[END OF DOCUMENT]