COMMERCIAL LEASE AGREEMENT

(State of Vermont)

[// GUIDANCE: This template is drafted for use in leasing commercial real property located in the State of Vermont. It is intentionally comprehensive and assumes a sophisticated transaction between business entities. Practitioners should delete inapplicable provisions, add transaction-specific details, and conform optional language to the parties’ negotiated terms.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Lease of Premises; Term
4. Rent; Additional Rent; Late Charges
5. Use of Premises; Compliance With Laws
6. Tenant Improvements; Alterations
7. Environmental Matters
8. Utilities & Building Services
9. Maintenance, Repairs & Inspections
10. Assignment & Subletting
11. Insurance
12. Representations & Warranties
13. Covenants
14. Defaults & Remedies
15. Risk Allocation
16. Dispute Resolution
17. General Provisions
18. Execution Blocks

1. DOCUMENT HEADER

COMMERCIAL LEASE AGREEMENT (this “Lease”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between:

Landlord: [LANDLORD LEGAL NAME], a [STATE & ENTITY TYPE] (“Landlord”)
Tenant: [TENANT LEGAL NAME], a [STATE & ENTITY TYPE] (“Tenant”)

Landlord and Tenant are sometimes referred to individually as a “Party” and collectively as the “Parties.”

1.1 Recitals

A. Landlord is the fee simple owner of certain real property and improvements located at [PROPERTY ADDRESS] in the State of Vermont (“Property”).
B. Tenant desires to lease a portion of the Property consisting of approximately [SQUARE FEET] rentable square feet as depicted on Exhibit A (the “Premises”).
C. Landlord is willing to lease the Premises to Tenant under the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

2. DEFINITIONS

For convenience and clarity, the following capitalized terms have the meanings set forth below. Any term not defined herein shall have its generally accepted legal meaning.

“Additional Rent” – All sums, liabilities, and obligations (other than Base Rent) required to be paid by Tenant under this Lease.

“Base Rent” – The recurring monthly rent amount specified in Section 4.1.

“Building” – The structure(s) located on the Property containing the Premises.

“Business Days” – Monday through Friday excluding Vermont-recognized legal holidays.

“Commencement Date” – The date the Term begins as determined under Section 3.2.

“Environmental Laws” – Any applicable federal, state, or local statute, regulation, ordinance, or common-law duty relating to protection of the environment, health, or safety, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.) and the Vermont Hazardous Waste Management Regulations (Vt. Code R. 7-306).

“Event of Default” – Any of the events set forth in Section 14.1.

“Force Majeure” – Events beyond a Party’s reasonable control as delineated in Section 15.5.

“Lease Year” – Each consecutive twelve-month period following the Commencement Date (or portion thereof for the first and last Lease Years).

“Permitted Use” – The business activity authorized in Section 5.1.

“Premises” – Defined in Recital B.

“Rent” – Base Rent plus Additional Rent.

“Security Deposit” – The deposit described in Section 4.5.

“Term” – The duration of Tenant’s tenancy as defined in Section 3.1.

[// GUIDANCE: Add or delete defined terms as necessary. Cross-references auto-update if you maintain consistent headings.]

3. LEASE OF PREMISES; TERM

3.1 Lease. Landlord hereby leases the Premises to Tenant, and Tenant leases the Premises from Landlord, subject to the terms herein.

3.2 Commencement & Expiration.
(a) Commencement Date: The earlier of (i) the date Tenant first occupies the Premises for the Permitted Use, or (ii) [SPECIFY DATE].
(b) Term: The Term shall continue for [NUMBER] Lease Years and expire on [EXPIRATION DATE], unless earlier terminated pursuant to this Lease.

3.3 Possession & Delivery Condition. Landlord shall deliver the Premises with all Building systems in good working order and [SHELL/“AS-IS”] condition, free of occupants. Tenant waives any Vermont implied warranty of habitability to the extent permitted by law with respect to commercial leases.

4. RENT; ADDITIONAL RENT; LATE CHARGES

4.1 Base Rent. Tenant shall pay monthly Base Rent of $[AMOUNT] in advance on or before the first (1st) Business Day of each calendar month.

[// GUIDANCE: Insert rent escalations if applicable.]

4.2 Additional Rent.
(a) Operating Expenses: Tenant shall pay [PRO RATA SHARE]% of Operating Expenses as further detailed in Exhibit B.
(b) Taxes: Tenant shall pay its proportionate share of real estate taxes and assessments.
(c) Utilities: Tenant shall pay for all utilities serving the Premises directly to providers or as billed by Landlord.

4.3 Manner of Payment. All Rent shall be paid in lawful U.S. currency by electronic funds transfer to an account designated by Landlord unless Landlord directs otherwise.

4.4 Late Charges & Interest. If Tenant fails to pay any Rent within [GRACE PERIOD] days after it becomes due, Tenant shall pay (i) a late charge of [_]% of the overdue amount, and (ii) interest on such amount at the lesser of []% per annum or the highest rate permitted by Vermont law from the due date until paid.

4.5 Security Deposit. Tenant shall deposit with Landlord $[AMOUNT] as security for performance of Tenant’s obligations. Landlord may commingle the Security Deposit with other funds and shall have no obligation to pay interest thereon unless required by law.

5. USE OF PREMISES; COMPLIANCE WITH LAWS

5.1 Permitted Use. Tenant shall use the Premises solely for [SPECIFY PERMITTED USE] and for no other purpose without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed.

5.2 Prohibited Activities. Tenant shall not:
(a) Violate any law or regulation;
(b) Create nuisance, waste, or unreasonable interference with other occupants;
(c) Use or store hazardous materials except customary office/industrial supplies in compliance with Environmental Laws.

5.3 Legal Compliance. Tenant shall, at its expense, comply with all applicable laws, orders, and regulations relating to (i) the Premises, (ii) the conduct of Tenant’s business, and (iii) accessibility and life-safety requirements (e.g., ADA, applicable Vermont Fire & Building Safety Codes).

5.4 Governmental Approvals. Tenant shall obtain, maintain, and post all governmental licenses and permits required for the Permitted Use.

6. TENANT IMPROVEMENTS; ALTERATIONS

6.1 Tenant Improvements. Tenant may construct initial tenant improvements in accordance with plans approved by Landlord and subject to Exhibit C.

6.2 Alterations. Tenant shall not make any Alterations to the Premises without Landlord’s prior written consent, such consent not to be unreasonably withheld. All Alterations shall (i) be performed in a good and workmanlike manner, (ii) comply with all laws, and (iii) be performed by licensed, insured contractors.

6.3 Removal & Restoration. Unless Landlord elects otherwise at the time of consent, Tenant shall remove Alterations at Lease end and restore the Premises to its prior condition, reasonable wear and tear excepted.

7. ENVIRONMENTAL MATTERS

7.1 Tenant Environmental Covenants. Tenant shall:
(a) Comply with all Environmental Laws;
(b) Not generate, use, treat, store, or dispose of Hazardous Substances on the Premises except as permitted under Section 5.2(c);
(c) Promptly provide Landlord copies of any written notice, claim, or order relating to Environmental Laws affecting the Premises.

7.2 Landlord Environmental Compliance. Landlord represents that, to its knowledge, the Premises is in compliance with applicable Environmental Laws as of the Effective Date. Landlord shall remediate any pre-existing contamination required by law.

7.3 Indemnity. Tenant shall indemnify, defend, and hold Landlord harmless from any claims, costs, or liabilities (including reasonable attorney fees) arising from Tenant’s breach of Section 7.1. [Indemnification limited to “tenant_use_indemnity” per metadata.]

[// GUIDANCE: For high-risk uses, consider adding Phase I/Phase II environmental site assessment requirements and environmental insurance.]

8. UTILITIES & BUILDING SERVICES

8.1 Utilities. Tenant shall pay for and maintain all utilities serving the Premises. Landlord makes no representation regarding service capacity except as expressly set forth in this Lease.

8.2 Interruption. Interruption of utilities due to events beyond Landlord’s control shall not be a constructive eviction nor entitle Tenant to abate Rent, except where such interruption exceeds [X] consecutive days and materially impairs Tenant’s use.

9. MAINTENANCE, REPAIRS & INSPECTIONS

9.1 Landlord Obligations. Landlord shall maintain the Building’s structural components, roof, and common areas in good order and repair, except to the extent damage is caused by Tenant.

9.2 Tenant Obligations. Tenant shall at its expense maintain the Premises (including HVAC servicing Premises if separately metered) in neat, safe condition.

9.3 Inspections. Landlord may enter the Premises on reasonable notice (except in emergencies) to inspect, repair, or show the Premises to prospective purchasers or tenants.

10. ASSIGNMENT & SUBLETTING

10.1 Consent Requirement. Tenant shall not assign this Lease or sublet all or any portion of the Premises (collectively, a “Transfer”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Vermont law does not impose a default reasonableness standard for commercial leases; therefore this clause expressly governs.

10.2 Transfer Procedure. Tenant shall provide Landlord not less than [30] days’ advance written notice of the proposed Transfer together with: (i) current financials of transferee, (ii) business description, and (iii) draft assignment or sublease.

10.3 Recapture Right. Within [15] days after receiving notice, Landlord may elect to recapture the Premises (or portion) in lieu of consenting to the Transfer.

10.4 Continuing Liability. No Transfer shall release Tenant or any guarantor from liability under this Lease absent express written release by Landlord.

11. INSURANCE

11.1 Tenant Insurance. At all times during the Term, Tenant shall maintain:
(a) Commercial General Liability Insurance with combined single limits of not less than $[AMOUNT] per occurrence and $[AMOUNT] aggregate naming Landlord, its affiliates, and mortgagee as additional insureds;
(b) Property Insurance covering Tenant’s personal property and improvements on a “special perils” basis at replacement cost;
(c) Workers’ Compensation as required by Vermont law;
(d) Business Interruption Insurance for a period of not less than [____] months of Rent.

11.2 Landlord Insurance. Landlord shall maintain property insurance on the Building and commercial general liability coverage in commercially reasonable amounts.

11.3 Waiver of Subrogation. Each Party waives, and shall cause its insurers to waive, subrogation claims against the other Party to the extent of insurance proceeds received.

12. REPRESENTATIONS & WARRANTIES

12.1 Mutual. Each Party represents and warrants that:
(a) It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;
(b) It has full power and authority to execute and perform this Lease;
(c) Execution of this Lease has been duly authorized;
(d) The individual signing this Lease on its behalf is duly authorized to bind the Party.

12.2 Survival. The representations and warranties in this Section shall survive the execution of this Lease and remain in effect for [12] months following expiration or earlier termination.

13. COVENANTS

13.1 Affirmative. Tenant shall:
(a) Pay Rent when due;
(b) Maintain insurance per Section 11;
(c) Promptly discharge liens;
(d) Comply with Environmental Laws.

13.2 Negative. Tenant shall not:
(a) Make Alterations contrary to Section 6;
(b) Permit any mechanics’ lien to be filed against the Premises;
(c) Conduct auctions or fire sales without Landlord’s consent.

13.3 Notice & Cure. Each Party shall promptly notify the other of any condition causing material damage or injury to persons or property at the Premises. Tenant shall have [30] days from receipt of notice (or sooner if required to prevent further damage or violation of law) to cure any non-monetary breach.

14. DEFAULTS & REMEDIES

14.1 Events of Default. The following constitute Events of Default:
(a) Failure to pay any Rent within [10] days after written notice;
(b) Breach of any non-monetary obligation not cured within [30] days (or such longer period as reasonably required if cure commenced within 30 days and diligently pursued);
(c) Tenant’s insolvency, assignment for benefit of creditors, or bankruptcy petition not dismissed within [60] days;
(d) Abandonment or vacatur of the Premises for more than [30] days.

14.2 Landlord Remedies. Upon an Event of Default, Landlord may, subject to Vermont commercial eviction procedures under 12 V.S.A. Chapter 169:
(i) Accelerate all Rent due for the balance of the Term;
(ii) Terminate Tenant’s right of possession and re-enter;
(iii) Seek summary ejectment and possession;
(iv) Relet the Premises and recover the deficiency;
(v) Exercise any other remedy available at law or equity.

14.3 Mitigation Duty. Landlord shall use commercially reasonable efforts to mitigate damages following Tenant’s abandonment or eviction, consistent with Vermont case law.

14.4 Attorneys’ Fees. The prevailing Party in any action or proceeding to enforce this Lease shall be entitled to recover reasonable attorneys’ fees and costs.

15. RISK ALLOCATION

15.1 Indemnification by Tenant. Tenant shall indemnify, defend, and hold harmless Landlord and its agents from and against any and all claims, damages, liabilities, and expenses arising out of: (i) Tenant’s use or occupancy of the Premises; (ii) Tenant’s breach of this Lease; or (iii) Tenant’s negligence or willful misconduct (“Tenant Indemnity”). Landlord shall provide prompt written notice and the opportunity to control defense.

15.2 Indemnification by Landlord. Landlord shall indemnify Tenant from claims arising out of Landlord’s gross negligence or willful misconduct.

15.3 Limitation of Liability. [OPTION 1 – INSERT LIABILITY CAP] Neither Party’s liability for direct damages shall exceed $[CAP AMOUNT], except for (i) Tenant’s indemnity obligations, (ii) unpaid Rent, and (iii) claims covered by insurance. [OPTION 2 – “LIABILITY CAPS: negotiable”. Delete or revise as negotiated.]

15.4 Exclusion of Consequential Damages. Except with respect to indemnities for third-party claims, neither Party shall be liable for consequential, special, or punitive damages.

15.5 Force Majeure. Neither Party shall be liable for delay or failure to perform (other than Tenant’s monetary obligations) due to acts of God, war, terrorism, pandemic, governmental orders, or other events beyond reasonable control, provided the affected Party notifies the other within [5] Business Days and resumes performance promptly.

16. DISPUTE RESOLUTION

16.1 Governing Law. This Lease shall be governed by and construed in accordance with the real-property and contract laws of the State of Vermont, without regard to conflicts-of-law rules.

16.2 Forum Selection. The Parties consent to exclusive jurisdiction of the state courts located in [COUNTY], Vermont, for any action arising out of this Lease.

16.3 Arbitration. [OPTIONAL – If elected] Any dispute not resolved within [30] days of written notice shall be submitted to binding arbitration administered by the American Arbitration Association in Burlington, Vermont, in accordance with its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.

16.4 Jury Trial Waiver. [OPTIONAL] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS LEASE.

16.5 Injunctive Relief. Notwithstanding Section 16.3, Landlord may seek immediate injunctive relief or an order of ejectment in aid of eviction remedies permitted under Vermont law.

17. GENERAL PROVISIONS

17.1 Amendments & Waivers. No amendment or waiver shall be effective unless in writing and signed by both Parties. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.

17.2 Successors & Assigns. Subject to Section 10, this Lease shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

17.3 Severability. If any provision is held unenforceable, it shall be modified to reflect the Parties’ intent as nearly as possible, and the remaining provisions shall remain in full force.

17.4 Entire Agreement. This Lease (including exhibits and schedules) constitutes the entire agreement and supersedes all prior negotiations or agreements, oral or written.

17.5 Notices. All notices shall be in writing and delivered by (i) certified U.S. mail, return receipt requested, (ii) nationally recognized overnight courier, or (iii) electronic mail with confirmed receipt, addressed to the respective Party at the address set forth below (or such other address as either Party may designate).

17.6 Counterparts; Electronic Signatures. This Lease may be executed in counterparts, each of which shall be deemed an original. Signatures delivered by PDF or electronic signature technology (e.g., DocuSign) shall be deemed original and binding.

17.7 No Partnership. Nothing contained herein shall be deemed or construed as creating a partnership, joint venture, or agency relationship between the Parties.

17.8 OFAC Compliance. Each Party represents that it is not, and is not acting on behalf of, any person identified on any OFAC list of prohibited persons.

18. EXECUTION BLOCKS

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 notarization if required for recordation or if executing a memorandum of lease.]

Exhibit A – Floor Plan / Premises Diagram

Exhibit B – Operating Expense Allocation Methodology

Exhibit C – Tenant Improvement Work Letter

Exhibit D – Form of Subordination, Non-Disturbance & Attornment Agreement

[// GUIDANCE: A memorandum of lease may be recorded in the local land records for public notice without disclosing financial terms. Adapt Section references if a memorandum is prepared.]