Professional Commercial Lease Drafting

Commercial Lease Drafting With NNN and CAM Negotiation

Commercial lease agreements drafted by AI or licensed attorneys. Whether you are a landlord leasing retail, office, or industrial space, or a tenant negotiating a triple net lease, gross lease, or modified gross lease, our commercial lease service delivers enforceable, state-specific agreements with proper CAM charges, escalation clause terms, and tenant improvements provisions, starting at $249.

By Jessica Henwick, Editor-in-ChiefLegally reviewed by David Chen, Esq.
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What Is a Commercial Lease Agreement?

A commercial lease is a legally binding contract between a landlord and a tenant that governs the rental of property used for business purposes, including retail storefronts, office suites, industrial warehouses, restaurants, and medical facilities. Unlike residential leases, which are heavily regulated by state landlord-tenant statutes, commercial leases are governed primarily by the negotiated terms of the agreement itself. Commercial leases are governed by contract law rather than protective landlord-tenant statutes.

This distinction is critical. Residential tenants benefit from an implied warranty of habitability, security deposit caps, mandatory disclosures, and strict eviction timelines. Commercial tenants receive almost none of these protections. The lease term in a commercial agreement typically spans 3 to 10 years, and the financial obligations extend far beyond base rent. Depending on the lease structure, a commercial tenant may also be responsible for property taxes, insurance premiums, common area maintenance costs, percentage rent tied to gross revenue, and the cost of tenant improvements to customize the space for their business operations.

Because the stakes are significantly higher and the legal protections fewer, professional commercial lease drafting is essential for both landlords and tenants. A properly drafted commercial lease anticipates disputes over CAM charges, establishes clear renewal option procedures, defines the scope of permitted operations through a use clause, and allocates risk through personal guarantee provisions. Whether you are drafting a new lease or reviewing one presented by the other party, our contract drafting service ensures every provision protects your interests.

Types of Commercial Leases We Draft

Each commercial lease structure allocates operating expenses differently between landlord and tenant. Understanding these differences is critical before signing any lease agreement.

Triple Net (NNN)

Modified Gross

Full-Service Gross

Percentage Lease

Who Pays Taxes
Tenant
Negotiated split
Landlord
Varies (often tenant)
Who Pays Insurance
Tenant
Negotiated split
Landlord
Varies (often tenant)
Who Pays Maintenance
Tenant
Shared
Landlord
Landlord typically
Best For
Single-tenant buildings
Multi-tenant offices
Professional offices
Retail in high-traffic
Typical Tenants
Chains, franchises
Professional firms
Small businesses
Retail, restaurants
Risk Level for Tenant
High (variable costs)
Moderate
Low (predictable)
Variable (revenue-tied)

Triple net lease requires tenant to pay taxes insurance and maintenance. Not sure which structure fits your situation? Use our commercial lease generator to draft the right lease type for your property, or request attorney guidance for complex multi-tenant arrangements.

The Net-Lease Ladder: Single Net, Double Net, and Triple Net

The word “net” counts how many operating-expense categories pass through to the tenant on top of base rent. Each rung of the ladder moves one more cost from landlord to tenant, so the difference between an N, an NN, and an NNN lease is simply how far that pass-through extends.

N

Single Net (N)

Tenant pays base rent plus property taxes. The landlord still carries the building insurance and all maintenance.

NN

Double Net (NN)

Tenant pays base rent plus property taxes and building insurance premiums. The landlord keeps responsibility for structural and common-area maintenance.

NNN

Triple Net (NNN)

Tenant pays base rent plus property taxes, insurance, and maintenance, including common-area maintenance and, in most single-tenant deals, roof and structural repairs.

Residential leases allocate these costs differently; compare this pass-through structure with a standard residential rental agreement, or review our lease agreement drafting options for either property type.

Key Provisions in a Commercial Lease

Every commercial lease agreement must address these ten critical provisions. Missing even one can expose you to significant financial liability.

Base Rent & Escalation

Defines the initial base rent amount and the method of annual increases. Escalation clauses may use fixed percentage increases (typically 2–4%), CPI-indexed adjustments tied to inflation, or periodic market rate resets. A poorly drafted escalation clause can cost a tenant tens of thousands of dollars over a long lease term.

CAM Charges

Common area maintenance charges cover shared property expenses including parking lot upkeep, landscaping, security, elevator maintenance, and janitorial services. CAM charges are calculated based on the tenant’s proportionate share of leasable space. Without a negotiated cap, these charges can increase unpredictably each year.

Tenant Improvements

Covers the build-out allowance the landlord provides for customizing the space and specifies who owns the improvements at lease termination. A well-drafted tenant improvement clause includes a detailed construction timeline, change order procedures, and whether the tenant must restore the space to its original condition upon vacating.

Use & Exclusive Use Clause

The use clause defines exactly what business activities the tenant may conduct on the premises. The exclusive use clause prevents the landlord from leasing adjacent spaces to competing businesses—critical for retail tenants whose revenue depends on not having a direct competitor in the same shopping center or building.

Assignment & Sublease

Determines whether the tenant can transfer the lease to a new tenant (assignment) or rent a portion of the space to a third party (sublease). Most landlords restrict both rights and require prior written consent. The assignment clause should specify whether the original tenant remains liable after assignment.

Personal Guarantee

When a business entity signs a commercial lease, landlords often require the owner to personally guarantee the lease obligations. This means the owner’s personal assets are at risk if the business defaults. Negotiating a guarantee burn-off—where the guarantee expires after a period of on-time payments—is essential.

Renewal Options

Grants the tenant the right to extend the lease for additional terms at predetermined or fair-market rental rates. Renewal option clauses must specify exact notice deadlines, how the renewal rent will be calculated, and whether the tenant retains their existing build-out. Missing a renewal notice deadline can forfeit the option entirely.

Default & Remedies

Defines what constitutes a lease default by either party, the cure period allowed to remedy the breach, and the landlord’s remedies including lease termination, acceleration of rent, and recovery of damages. Commercial tenants should negotiate reasonable cure periods (typically 10–30 days for monetary defaults and 30–60 for non-monetary).

Holdover & Holdover Rent

Governs what happens when a tenant stays in the premises after the lease term expires. A holdover clause sets penalty rent, commonly 150 to 200 percent of base rent, and specifies whether continued occupancy creates a month-to-month tenancy at the landlord’s election or exposes the tenant to trespass liability plus consequential damages, such as claims from an incoming tenant who cannot take possession. Without a clear holdover provision, an overstaying tenant faces open-ended exposure.

Commercial Security Deposit

A commercial security deposit typically equals one to three months of rent and is far less regulated than a residential deposit. Landlords may commingle the deposit with their own funds, so if the landlord files bankruptcy the tenant becomes an unsecured creditor for the return of the money. A letter of credit is a common alternative that keeps the collateral out of the landlord’s estate. The clause should state how the deposit is applied on default and the conditions for its return.

Estoppel, SNDA, Casualty, and Indemnity Provisions

Beyond the core economic terms, a complete commercial lease governs the relationship between the tenant, the landlord, and the landlord's lender or a future buyer. These structural clauses decide what survives a sale, a foreclosure, or a casualty.

Estoppel Certificates

An estoppel certificate is a signed statement in which the tenant confirms the key facts of the lease, the current rent, the lease dates, any prepaid amounts, and that neither party is in default, for the benefit of a buyer or lender. Once signed, the tenant is estopped from later contradicting those facts. Leases require the tenant to return an estoppel within a short window, often 10 to 20 days, after a written request.

SNDA: Subordination, Non-Disturbance, Attornment

An SNDA sets the relationship between the tenant and the landlord's mortgage lender. Subordination places the lease behind the mortgage in priority. Non-disturbance protects the tenant by promising the lease survives a foreclosure so long as the tenant is not in default. Attornment obligates the tenant to recognize the foreclosing lender or buyer as the new landlord. Tenants should insist on the non-disturbance piece, because bare subordination without it can let a foreclosure extinguish the lease.

Casualty and Condemnation

The casualty clause governs rebuilding and rent abatement when fire, flood, or another loss damages the premises, and it fixes the point at which either party may terminate instead of rebuild. The condemnation clause allocates the award and the termination rights when a government takes the property by eminent domain. Both clauses decide who carries the risk of events outside either party's control.

Indemnification and Waiver of Subrogation

The indemnification clause shifts liability for claims arising from each party's use of the premises, with the tenant typically indemnifying the landlord for injuries on the leased space. A waiver of subrogation then bars each party's property insurer from suing the other to recover what it paid, so both sides carry their own coverage and agree to look to their own policies first. Pairing the two prevents circular liability between insured parties.

How Our Commercial Lease Service Works

Two paths to a professionally drafted commercial lease. Choose the approach that matches your timeline, budget, and lease complexity.

AI-Generated Path

1

Select your lease type

Choose from triple net, modified gross, full-service gross, or percentage lease structures. Each type has a dedicated workflow with provisions specific to that structure.

2

Specify property and lease terms

Enter property details, lease term, base rent, escalation method, CAM charge structure, tenant improvement allowance, and your state jurisdiction.

3

AI drafts your state-specific lease

The system generates a comprehensive commercial lease with proper use clauses, renewal options, assignment restrictions, default provisions, and state-mandated disclosures.

4

Review, download, and execute

Review the completed lease, download in PDF or DOCX, and use our built-in e-signature tool to collect signatures from all parties.

Starting at $249 · Delivered in minutes

Try the commercial lease generator

Attorney-Drafted Path

1

Submit your lease requirements

Describe the property type, desired lease structure, tenant improvement needs, any existing LOI or term sheet, your state, and specific concerns.

2

Attorney reviews and consults

A licensed attorney with commercial real estate experience reviews your requirements and contacts you to clarify CAM structures, guarantee terms, and tenant-specific needs.

3

Custom lease drafting

Your attorney drafts the full commercial lease from scratch, including customized CAM reconciliation provisions, tenant improvement schedules, and exclusive use protections.

4

Negotiate and revise

Review the draft with the other party, request revisions, and work with your attorney on counterproposals until every provision meets your requirements.

5

Execute and store securely

Receive the final lease in PDF and DOCX. Use our e-signature tool to collect all signatures and store the executed lease in your secure document vault.

From $149 · 24-72 hour delivery

See attorney pricing

Commercial Lease Services: AI vs. Attorney vs. DIY

Not sure which commercial lease service tier is right for your situation? This comparison covers lease-specific capabilities that matter most.

AI-Generated

Attorney-Drafted

DIY / Templates

Price
From $249
From $149
Free - $50
CAM Charge Calculation
Standard formula
Custom with caps & audits
Not included
Tenant Improvement Negotiation
Template provisions
Fully negotiated
Not addressed
Personal Guarantee Review
Standard language
Custom burn-off terms
Not covered
Exclusive Use Clause
Basic protection
Industry-specific drafting
Rarely included
Sublease Provisions
Standard restrictions
Custom with recapture rights
Generic
Environmental Compliance
State-specific basics
Full Phase I/II allocation
Not addressed
ADA Compliance
Standard allocation
Custom responsibility split
Not addressed
Lease Abstract
Not included
Included with review
Not included
Delivery Time
Minutes
24-72 hours
Varies
State Compliance
Automated
Attorney-verified
Not guaranteed
Best For
Standard retail / office
Complex / high-value
Simple, low-risk

Commercial Lease Pricing

Transparent pricing for every commercial lease complexity level. No hidden fees, no hourly surprises.

AI-Assisted

$249

AI-generated, state-specific commercial lease

  • NNN, gross, or modified gross structure
  • State-specific provisions
  • Standard CAM charge clauses
  • Base rent with escalation
  • Use clause and permitted operations
  • PDF & DOCX export
  • E-signature ready
Get Started
Most Popular

Attorney Review

$149–$299

Attorney-customized with lease-specific protections

  • Everything in AI-Assisted
  • CAM cap negotiation & audit rights
  • Tenant improvement schedule
  • Personal guarantee burn-off terms
  • Exclusive use clause drafting
  • Assignment & sublease provisions
  • Direct attorney communication
  • Unlimited revisions, free
Most Popular

Attorney-Drafted

$699

Fully custom attorney-drafted commercial lease

  • Everything in Attorney Review
  • Complex multi-tenant provisions
  • Environmental & ADA compliance
  • Percentage rent calculations
  • Build-to-suit specifications
  • Lease abstract included
  • Unlimited revisions
  • Phone consultation included
Request Attorney-Drafted

Commercial Lease Law: What Every Tenant and Landlord Should Know

Commercial lease law differs fundamentally from residential lease law. The most significant difference is the absence of an implied warranty of habitability in commercial leases. In a residential lease, the landlord is legally obligated to maintain the property in a livable condition. In a commercial lease, the condition of the premises is governed entirely by the lease terms. If the lease does not require the landlord to make repairs, the tenant may be responsible for all maintenance, even structural issues. Commercial tenants have no implied warranty of habitability and must negotiate all maintenance obligations in the lease.

Percentage rent is a provision unique to commercial leasing, particularly in retail environments. Under a percentage lease, the tenant pays a base rent plus a percentage of gross sales revenue exceeding a defined breakpoint. For example, a retailer might pay $5,000 per month in base rent plus 6% of gross sales exceeding $100,000 per month. This structure aligns landlord and tenant interests but requires careful drafting of reporting requirements, audit rights, and definitions of “gross sales” to prevent disputes. Percentage rent aligns landlord revenue with tenant business performance.

The build-out allowance (also called a tenant improvement allowance or TI allowance) is the amount the landlord contributes toward customizing the space for the tenant's business. This allowance is negotiated during lease discussions and typically ranges from $10 to $60 per square foot depending on the market, property class, and lease term. A longer lease term typically justifies a higher TI allowance because the landlord recoups the investment over more years of rent payments.

Escalation clause provisions determine how rent increases over the lease term. The three common methods are fixed percentage increases (2–4% annually), Consumer Price Index (CPI) adjustments tied to inflation, and periodic fair market value resets. Each method carries different risk profiles. Escalation clauses in commercial leases determine the trajectory of rent increases over the entire lease term. Fixed increases provide predictability; CPI adjustments track inflation; market resets can create dramatic jumps if market rents have risen significantly. Our contract comparison tool can analyze whether your proposed escalation structure exposes you to excessive cost increases over the lease term.

The sublease and assignment clause provisions govern whether a tenant can transfer its lease obligations. In a sublease, the original tenant remains liable to the landlord while renting all or part of the space to a subtenant. In an assignment, the lease is transferred to a new tenant entirely. Most landlords restrict both rights and retain the ability to recapture the space (terminating the lease) if the tenant attempts to assign. These provisions are critical for businesses that may need to downsize, relocate, or close during a multi-year lease term.

Pro Tip

Always negotiate a cap on CAM charges in your commercial lease. Without a cap, your common area maintenance costs can increase without limit each year. A typical CAM cap limits annual increases to 3–5% over the prior year's actual costs. Also insist on annual reconciliation statements and the right to audit the landlord's CAM calculations. Many tenants discover they are being overcharged only after exercising audit rights. CAM charges cover common area maintenance costs shared among tenants.

Warning

A personal guarantee in a commercial lease pierces the liability protection of your LLC, corporation, or other business entity. If your business defaults on the lease, the landlord can pursue your personal assets, your home, savings, and other property, to satisfy the lease obligations. Personal guarantees survive the entity's bankruptcy, meaning the landlord can still collect from you personally even if the business ceases to exist. Personal guarantees survive LLC protection and expose the owner's personal assets to lease liability. Always negotiate a guarantee burn-off clause that eliminates the personal guarantee after 12–24 months of on-time payments, or negotiate a cap on the guarantee amount.

Key Insight

An exclusive use clause is one of the most valuable provisions a retail tenant can negotiate. This clause prevents the landlord from leasing other spaces in the same property to businesses that directly compete with yours. For example, a coffee shop tenant with an exclusive use clause can prevent the landlord from leasing to another coffee shop, bakery, or any business that derives more than a specified percentage of revenue from coffee sales. Without an exclusive use clause, a landlord could lease the space next door to your direct competitor, devastating your revenue while you remain locked into a multi-year lease. Exclusive use clauses prevent landlords from leasing to competing businesses in the same property. Our document review service can evaluate whether your existing lease includes adequate exclusive use protection.

Frequently Asked Questions About Commercial Lease Services

Everything you need to know about commercial lease drafting, pricing, key provisions, and how commercial leases differ from residential agreements.

Who pays for repairs in a commercial lease?
Responsibility for repairs in a commercial lease depends entirely on the lease structure negotiated between landlord and tenant. In a triple net lease (NNN), the tenant is typically responsible for virtually all repairs and maintenance, including HVAC, plumbing, electrical, roof, and structural repairs. In a gross lease, the landlord usually covers structural repairs, roof, exterior walls, and building systems, while the tenant handles interior cosmetic maintenance. In a modified gross lease, the parties split repair responsibilities based on negotiated terms, commonly the landlord covers structural and capital repairs while the tenant handles routine maintenance and repairs under a set dollar threshold. Regardless of structure, a well-drafted commercial lease should explicitly define repair categories (structural vs. non-structural, capital vs. ordinary), allocate HVAC maintenance specifically, set caps on tenant repair obligations, and require the landlord to maintain warranties. Our commercial lease generator includes clear repair-allocation provisions matched to your chosen lease structure.
What is a personal guarantee on a commercial lease?
A personal guarantee on a commercial lease is a contractual promise by an individual, typically a business owner or officer, to be personally liable for the tenant’s lease obligations if the business fails to pay. It pierces the liability shield normally provided by an LLC or corporation, meaning the landlord can pursue the guarantor’s personal assets (home equity, savings, investments) for unpaid rent, damages, and costs. Landlords commonly require personal guarantees from small businesses, startups, and franchise operators because business entities may lack sufficient credit history or assets. Guarantees can be full (all lease obligations for the entire term) or limited, such as a burn-off guarantee (drops away after a set number of months of on-time payments), a good-guy guarantee (limits liability to rent owed until keys are returned), or a capped guarantee (limits total exposure to a dollar amount). Always negotiate for a limited guarantee structure. Our contract risk scanner flags unlimited personal guarantees as high-risk provisions and our attorney-drafted commercial lease tier can structure burn-off or capped guarantees that protect your personal assets.
What should be included in a commercial lease agreement?
A comprehensive commercial lease agreement must include several critical provisions beyond basic rent terms. Essential elements include: the lease term and renewal options with specific notice deadlines, base rent amounts with escalation clauses (fixed percentage, CPI-indexed, or market rate adjustments), CAM charges with caps and reconciliation procedures, tenant improvement allowances and build-out specifications, a clear use clause defining permitted operations, an exclusive use clause preventing landlord from leasing to competitors, assignment and sublease rights, personal guarantee terms if applicable, default and remedies provisions with cure periods, insurance requirements for both parties, ADA compliance responsibilities, and environmental compliance obligations. Our commercial lease generator covers all of these provisions automatically.
What is the difference between a commercial lease and a residential lease?
Commercial and residential leases differ in several fundamental ways. Residential tenants benefit from extensive statutory protections including the implied warranty of habitability, limits on security deposits, mandatory disclosure requirements, and strict eviction procedures. Commercial tenants receive almost none of these protections. Commercial leases are governed primarily by the contract terms the parties negotiate, not by protective statutes. Commercial lease terms are typically 3–10 years versus 1 year for residential. Commercial leases often include percentage rent tied to revenue, CAM charges, tenant improvement negotiations, and personal guarantees—none of which apply to residential leases. Because commercial tenants have fewer legal protections, professional drafting through a service like our contract drafting service is especially important.
What is the difference between a NNN lease and a gross lease?
A triple net lease (NNN) requires the tenant to pay base rent plus all three operating expenses: property taxes, insurance premiums, and maintenance costs. The landlord receives net rent with no responsibility for operating expenses. A gross lease (also called a full-service lease) bundles all operating costs into a single rent payment—the landlord pays taxes, insurance, and maintenance from that amount. A modified gross lease falls between the two: landlord and tenant split operating expenses according to negotiated terms. Triple net leases give tenants more control over costs but more financial risk. Gross leases provide cost predictability but typically have higher base rent. Our commercial lease template includes options for all three structures with proper CAM charge provisions for each.
How long should a commercial lease term be?
The ideal commercial lease term depends on your business stage, industry, and investment in tenant improvements. Startups and new businesses often benefit from shorter terms (1–3 years) with renewal options, limiting commitment while the business establishes itself. Established businesses with significant build-out requirements typically negotiate 5–10 year terms to amortize their tenant improvement investment. Retail tenants in prime locations may sign 10–15 year leases to lock in favorable rental rates. Regardless of the initial term, always include a renewal option with predetermined rent escalation terms. Our contract risk scanner can evaluate whether your proposed lease term and renewal provisions adequately protect your interests given your build-out investment.
Can I negotiate the terms of a commercial lease?
Yes, virtually every provision in a commercial lease is negotiable, and failing to negotiate is one of the most costly mistakes tenants make. Key negotiable terms include base rent and escalation rates, CAM charge caps and audit rights, tenant improvement allowances, the length of the build-out period with free rent during construction, personal guarantee limitations (such as a burn-off clause that eliminates the guarantee after a set period), exclusive use provisions, assignment and sublease rights, renewal option terms, and early termination rights. Landlords expect negotiation in commercial leasing. Our document review service can analyze a landlord’s proposed lease, identify unfavorable terms, and provide specific counter-proposals for each negotiable provision.
What are CAM charges in a commercial lease?
CAM charges (Common Area Maintenance charges) are additional costs tenants pay to cover the landlord’s expenses for maintaining shared spaces in a commercial property. These typically include parking lot maintenance, landscaping, snow removal, elevator maintenance, lobby cleaning, shared utility costs, and security. CAM charges are usually calculated based on the tenant’s proportionate share of the total leasable area. For example, if your space represents 10% of the building, you pay 10% of total CAM costs. Without proper lease protections, CAM charges can increase unpredictably. Always negotiate a CAM cap (typically 3–5% annual increases), require annual reconciliation statements, and secure audit rights. Our commercial lease generator includes CAM charge provisions with built-in cap language and reconciliation requirements.
What is the difference between a single, double, and triple net lease?
The three net leases form a ladder based on how many operating-expense categories the tenant pays on top of base rent. In a single net lease (N), the tenant pays base rent plus property taxes, while the landlord still carries insurance and maintenance. In a double net lease (NN), the tenant pays base rent plus property taxes and building insurance premiums, and the landlord keeps structural and common-area maintenance. In a triple net lease (NNN), the tenant pays base rent plus all three, property taxes, insurance, and maintenance, including common-area maintenance and, in most single-tenant deals, roof and structural repairs. Each rung shifts one more cost from landlord to tenant, so an NNN lease places the fullest expense burden on the tenant in exchange for typically lower base rent.
What is holdover rent in a commercial lease?
Holdover rent is the elevated rent a tenant owes when it stays in the premises after the lease term expires without signing a new lease or renewal. Commercial leases commonly set holdover rent at 150 to 200 percent of the base rent that was in effect at the end of the term. The holdover clause also decides the legal character of the continued occupancy: it may create a month-to-month tenancy at the landlord’s election, or it may treat the tenant as a trespasser exposed to eviction and consequential damages, such as claims from an incoming tenant who cannot take possession on schedule. A clear holdover provision is important because, without one, an overstaying tenant can face open-ended and unpredictable liability.
How much is a security deposit on a commercial lease?
Commercial security deposits typically run one to three months of rent, though the amount is negotiated rather than capped, because commercial deposits are far less regulated than residential ones. Landlords are generally free to commingle the deposit with their own funds, which means that if the landlord files for bankruptcy, the tenant becomes an unsecured creditor for the return of the money rather than the owner of a segregated account. Tenants with leverage often substitute a letter of credit, which keeps the collateral out of the landlord’s estate. The lease should spell out how the deposit is applied on default and the conditions under which the balance is returned at the end of the term.

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