COMMERCIAL LEASE AGREEMENT
(Texas – Single-Tenant – Net Lease)
[// GUIDANCE: This template is drafted for use with a single-tenant, net (NNN) commercial lease in Texas. Modify to reflect multi-tenant structures, gross leases, retail-specific statutory requirements, or industry-specific regulatory overlays (e.g., medical, cannabis, warehousing) as necessary.]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
I. DOCUMENT HEADER
1.1 Parties. This Commercial Lease Agreement (this “Lease”) is 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 each, a “Party,” and collectively, the “Parties”).
1.2 Recitals.
A. Landlord is the fee simple owner of certain real property located at [PROPERTY ADDRESS], being more particularly described in Exhibit A (the “Land”).
B. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, [APPROXIMATE SQUARE FOOTAGE] rentable square feet of improvements located on the Land, together with associated appurtenant rights (collectively, the “Premises”), upon the terms and subject to the conditions set forth herein.
C. The consideration for this Lease includes the mutual covenants, obligations, and agreements herein contained.
1.3 Governing Jurisdiction. This Lease shall be governed by and construed in accordance with the internal laws of the State of Texas, without regard to conflict-of-law principles.
II. DEFINITIONS
For ease of reference, the following capitalized terms shall have the meanings set forth below; other terms may be defined contextually within the Lease. All cross-references are to Sections of this Lease unless otherwise noted.
“Additional Rent” – All monetary obligations of Tenant under this Lease other than Base Rent, including Taxes, Insurance Costs, Utilities, Common Area Maintenance (if any), late fees, and amounts payable under indemnities.
“Affiliate” – With respect to any entity, any other entity that directly or indirectly controls, is controlled by, or is under common control with such entity.
“Applicable Law” – Any federal, state, county, municipal, or local statute, ordinance, regulation, rule, code, order, judgment, decree, or common-law requirement, including without limitation the Texas Property Code, Chapters 24 and 93.
“Base Rent” – The rental installments set forth in Section 3.1.
“Business Days” – All days other than Saturdays, Sundays, and legal holidays in the State of Texas.
“Commencement Date” – The date identified in Section 2.2 on which the Term commences.
“Hazardous Materials” – Any substance defined, classified, or regulated under any Environmental Law, including without limitation petroleum products, asbestos, polychlorinated biphenyls, and radioactive materials.
“Indemnified Parties” – Landlord, its Affiliates, partners, members, managers, shareholders, officers, directors, employees, agents, successors, and assigns.
“Lease Year” – Each consecutive twelve-month period beginning on the Commencement Date (or anniversary thereof) and ending on the day immediately preceding the next anniversary.
“Permitted Use” – The use specified in Section 2.3.
“Security Deposit” – The amount specified in Section 3.4.
“Term” – The Initial Term (as defined in Section 2.2) together with any properly exercised Renewal Terms.
III. OPERATIVE PROVISIONS
2. Premises; Term; Use
2.1 Demise. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases same from Landlord, on a [TRIPLE-NET/NET] basis.
2.2 Term.
(a) Initial Term. The lease term shall commence on [COMMENCEMENT DATE] (“Commencement Date”) and continue for [NUMBER] ([##]) years (the “Initial Term”), unless sooner terminated in accordance with this Lease.
(b) Renewal Terms. Tenant shall have [NUMBER] successive options to renew the Lease for [NUMBER]-year terms each (each, a “Renewal Term”) by delivering written notice to Landlord not less than [##] days prior to the expiration of the then-current Term. Base Rent during each Renewal Term shall adjust as set forth in Section 3.2.
[// GUIDANCE: Insert fair-market-value rent reset mechanics or CPI indexing as negotiated.]
2.3 Permitted Use. Tenant shall use the Premises solely for [DESCRIBE PERMITTED USE] and for no other purpose without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.
2.4 Compliance with Laws. Tenant shall, at its sole cost, comply with Applicable Law relating to (a) the Premises and the use and occupancy thereof; (b) Tenant’s business operations; and (c) Environmental Laws as provided in Article 9.
3. Rent; Other Monetary Obligations
3.1 Base Rent. Tenant shall pay to Landlord annual Base Rent in the amount of $[AMOUNT] (plus any applicable sales or use tax), payable in equal monthly installments of $[AMOUNT] in advance on or before the first (1st) day of each calendar month during the Term.
3.2 Adjustments to Base Rent. Commencing on the first day of the second Lease Year and on each anniversary thereafter, Base Rent shall escalate by [PERCENTAGE]% (simple, non-cumulative) or [CPI-BASED FORMULA], whichever is greater.
3.3 Additional Rent. Tenant shall pay all Additional Rent within [NUMBER] days after Landlord’s invoice. All Rent (Base Rent and Additional Rent) shall be collectively referred to as “Rent.”
3.4 Security Deposit. Upon execution of this Lease, Tenant shall deliver a Security Deposit in the amount of $[AMOUNT] to secure Tenant’s faithful performance of its obligations. Landlord may commingle the Security Deposit with its general funds and shall not be required to pay interest thereon.
3.5 Late Charges; Interest. Rent not received within [NUMBER] days after due shall bear interest at the lesser of (i) [##]% per annum, or (ii) the maximum legal rate.
4. Taxes; Utilities; Operating Costs
4.1 Real Estate Taxes. Tenant shall pay or reimburse Landlord for all ad valorem real estate taxes, assessments, and governmental charges against the Premises (“Taxes”) during the Term. Tenant may contest Taxes in good faith so long as Tenant (i) first pays all contested Taxes under protest, and (ii) does not place the Premises in jeopardy of forfeiture or sale.
4.2 Utilities. Tenant shall contract for and pay all utility charges serving the Premises.
4.3 Operating Costs/Common Areas. If the Premises is part of a multi-parcel complex, Tenant shall pay its pro rata share of Common Area Maintenance (“CAM”) expenses as set forth in Exhibit B.
5. Maintenance and Repairs
5.1 Landlord Obligations. Landlord shall maintain and repair the structural elements of the building, including foundation, roof, and load-bearing walls, except to the extent damage is caused by Tenant.
5.2 Tenant Obligations. Tenant, at its expense, shall maintain the Premises in a first-class condition, including HVAC, plumbing, flooring, interior walls, and glass. All maintenance shall be performed by licensed contractors.
[// GUIDANCE: Shift more or fewer maintenance obligations to Tenant based on the economic bargain.]
6. Alterations; Liens
6.1 Alterations. Tenant shall not make any Alterations costing more than $[AMOUNT] per project or affecting structural elements or building systems without Landlord’s prior written consent.
6.2 Mechanic’s Liens. Tenant shall keep the Premises free from all liens. If any lien is filed, Tenant shall discharge the lien by bond or otherwise within [##] days after notice.
7. Assignment and Subletting
7.1 Restriction. Tenant shall not assign this Lease or sublease all or any portion of the Premises without Landlord’s prior written consent, which consent shall not be unreasonably withheld.
7.2 Permitted Transfers. Notwithstanding Section 7.1, Tenant may assign or sublet to an Affiliate upon [##] days’ prior written notice, provided Tenant remains liable under this Lease.
[// GUIDANCE: Texas law permits contractual freedom for commercial assignment/sublease; no statutory “reasonableness” mandate applies absent contract. Confirm desired standard with client.]
8. Insurance
8.1 Tenant Insurance. Tenant shall maintain throughout the Term:
(a) Commercial general liability insurance with minimum limits of $[LIMIT] per occurrence and $[LIMIT] aggregate, naming Landlord as additional insured;
(b) “All-risk” property insurance covering Tenant’s personal property and leasehold improvements;
(c) Workers’ compensation per statutory limits; and
(d) Business interruption insurance for not less than six (6) months of Rent.
8.2 Landlord Insurance. Landlord shall maintain property insurance covering the building (excluding Tenant’s property) in the amount of full replacement cost.
8.3 Certificates; Waiver of Subrogation. Each Party shall provide proof of insurance and obtain waivers of subrogation in favor of the other Party.
9. Environmental Matters
9.1 Compliance. Tenant shall (a) comply with all Environmental Laws; (b) not cause or permit any Hazardous Materials to be generated, used, or released on the Premises except customary quantities for Permitted Use and in compliance with Environmental Laws; and (c) promptly remediate any contamination caused by Tenant.
9.2 Environmental Indemnity. Tenant shall indemnify, defend, and hold harmless the Indemnified Parties from all Claims arising from Tenant’s breach of Section 9.1 or the presence of Hazardous Materials attributable to Tenant.
9.3 Environmental Audits. Upon Landlord’s request no more than once per Lease Year (absent default or suspected violation), Tenant shall provide an environmental inspection report prepared by a qualified environmental consultant at Tenant’s cost.
IV. REPRESENTATIONS & WARRANTIES
10.1 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 enter into and perform this Lease; and
(c) The execution, delivery, and performance of this Lease do not conflict with any agreement or Applicable Law binding on such Party.
10.2 Landlord’s Representations. Landlord further represents that:
(a) Landlord holds fee simple title to the Premises free and clear of encumbrances materially interfering with Tenant’s occupancy; and
(b) To Landlord’s knowledge, no notice has been received of any pending condemnation or zoning change materially affecting the Premises.
10.3 Survival. The representations and warranties herein shall survive the execution of this Lease and the Commencement Date for a period of one (1) year.
V. COVENANTS & RESTRICTIONS
11.1 Tenant Covenants. Tenant covenants that it shall:
(a) Operate its business continuously on the Premises during business hours customary for similar businesses, except for force majeure;
(b) Not commit waste or nuisance;
(c) Deliver estoppel certificates within [15] days of request;
(d) Maintain the Premises free of pests and refuse.
11.2 Negative Covenants. Tenant shall not:
(a) Use the Premises for any use that violates zoning;
(b) Permit any public auction, fire sale, or bankruptcy sale;
(c) Store or dispose of regulated medical or hazardous waste except as expressly permitted.
11.3 Notice & Cure. Each Party shall provide the other written notice of breach of any covenant, with a cure period of [30] days for monetary defaults and [30/60] days (as reasonable) for non-monetary defaults.
VI. DEFAULT & REMEDIES
12.1 Events of Default. Each of the following shall constitute an “Event of Default”:
(a) Tenant’s failure to pay Rent within [5] days after written notice;
(b) Tenant’s breach of any non-monetary obligation not cured within the applicable period;
(c) Tenant’s abandonment or vacatur of the Premises;
(d) Tenant’s insolvency, assignment for the benefit of creditors, or bankruptcy filing.
12.2 Landlord Remedies. Upon an Event of Default and after any required notice and cure periods, Landlord may, at its option:
(a) Terminate this Lease and repossess the Premises;
(b) Accelerate all Rent due for the balance of the Term, discounted to present value at [5]%;
(c) Re-enter and relet the Premises, holding Tenant liable for unpaid Rent and reletting costs;
(d) Recover attorneys’ fees and collection costs; and
(e) Seek injunctive or other equitable relief (including forcible detainer per Tex. Prop. Code ch. 24).
12.3 Cumulative Remedies. All remedies are cumulative and non-exclusive, except to the extent expressly limited herein.
12.4 Landlord Default. If Landlord materially defaults and fails to cure within [30] days after notice ([60] days if non-monetary and cure cannot reasonably be completed within 30 days), Tenant may pursue actual damages, injunctive relief, or specific performance; provided, however, Tenant shall have no right to offset Rent except as expressly provided.
VII. RISK ALLOCATION
13.1 Indemnification by Tenant. Tenant shall indemnify, defend, and hold harmless the Indemnified Parties from and against all claims, liabilities, damages, and costs (including reasonable attorneys’ fees) arising out of:
(a) Tenant’s use, occupancy, or operations on the Premises;
(b) The conduct of Tenant’s officers, employees, agents, contractors, or invitees;
(c) Tenant’s breach of this Lease or violation of Applicable Law; and
(d) Hazardous Materials for which Tenant is responsible.
[// GUIDANCE: “Tenant-use indemnity” required by metadata is incorporated here.]
13.2 Indemnification by Landlord. Landlord shall indemnify Tenant for claims arising out of Landlord’s gross negligence or willful misconduct.
13.3 Limitation of Liability. EXCEPT FOR (i) LIABILITY ARISING FROM A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (ii) TENANT’S INDEMNITY OBLIGATIONS, AND (iii) CLAIMS THAT CANNOT BE LIMITED UNDER APPLICABLE LAW, THE LIABILITY OF EITHER PARTY TO THE OTHER SHALL NOT EXCEED [CAP AMOUNT OR “THE AGGREGATE OF TWO (2) YEARS’ BASE RENT”].
13.4 Waiver of Consequential Damages. Each Party waives claims for lost profits, diminution in value, or other consequential, special, or punitive damages.
13.5 Force Majeure. Neither Party shall be liable for delay or failure to perform (other than monetary obligations) due to events beyond its reasonable control, including acts of God, war, terrorism, epidemics, governmental restrictions, or supply chain disruptions, provided the affected Party gives prompt notice and resumes performance promptly thereafter.
VIII. DISPUTE RESOLUTION
14.1 Governing Law. This Lease shall be governed by the laws of the State of Texas.
14.2 Forum Selection. Exclusive venue for any litigation shall lie in the state courts located in [COUNTY], Texas (and if federal jurisdiction exists, in the United States District Court for the [DISTRICT]).
14.3 Optional Arbitration. [ARBITRATION PROVISION ACTIVE? [YES/NO]]
If “YES,” the Parties agree to submit all disputes (except eviction or injunctive actions) to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment may be entered on the award in any court of competent jurisdiction.
14.4 Jury Trial Waiver. [JURY WAIVER ACTIVE? [YES/NO]]
If “YES,” each Party hereby irrevocably waives its right to a trial by jury in any action arising under or in connection with this Lease.
14.5 Injunctive Relief. Nothing herein shall limit Landlord’s statutory right to seek forcible detainer, writs of possession, or temporary restraining orders to regain possession of the Premises.
IX. GENERAL PROVISIONS
15.1 Amendments and Waivers. No amendment or waiver of any provision shall be effective unless set forth in a writing signed by both Parties.
15.2 Notices. All notices shall be in writing and deemed given upon (a) personal delivery, (b) certified mail, return receipt requested, postage prepaid, or (c) nationally recognized overnight courier, addressed to the Parties at the addresses set forth below (or such other address designated by notice).
15.3 Assignment by Landlord. Landlord may assign its interest in this Lease upon transfer of title to the Premises, whereupon Landlord shall be released from future obligations, and the transferee shall assume same.
15.4 Severability. If any provision is adjudged invalid, such determination shall not affect the validity of the remaining provisions, and the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.
15.5 Merger/Integration. This Lease constitutes the entire agreement of the Parties regarding the subject matter hereof and supersedes all prior negotiations and agreements.
15.6 Counterparts; Electronic Signatures. This Lease may be executed in multiple counterparts (including by electronic signature or PDF), each of which shall be deemed an original and all of which together constitute one instrument.
15.7 Successors and Assigns. Subject to the restrictions herein, this Lease shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
15.8 Time of Essence. Time is of the essence with respect to all obligations under this Lease.
15.9 No Recordation. Tenant shall not record this Lease or a memorandum thereof without Landlord’s prior written consent.
X. 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: For entities, confirm signatory authority via resolutions or certificates of incumbency. Consider notarization if local recording or financing requirements apply.]
EXHIBIT A
Legal Description of Land
[INSERT METES-AND-BOUNDS OR PLATTED DESCRIPTION]
EXHIBIT B
Common Area Maintenance & Operating Expense Allocation
[DESCRIBE EXPENSE CATEGORIES, ALLOCATION FORMULA, PAYMENT TIMING]
[// GUIDANCE:
1. Review Texas Property Code §§ 24.001–.011 (eviction) and §§ 93.001–.012 (commercial tenancies) for compliance with notice and self-help requirements.
2. For landlord’s lien rights under Tex. Prop. Code ch. 54, consider adding contractual landlord’s lien and security interest language if desired.
3. Confirm insurance limits meet lender requirements, if any.
4. Verify environmental representation and indemnity language against the client’s environmental risk profile.
5. All bracketed items must be populated or removed prior to execution.]