Free Alabama Commercial Lease Agreement

Step 1 of 30

Create your Commercial Lease Agreement
Type of Property being Leased:
- Office
- Building
- Retail Store
- Restaurant
- Industrial
- Warehouse
- Other

Customized Lease
Location of Property:
Different states have different rules and regulations.
Your Commercial Lease Agreement will be customized for .
Type of contract:
- Standard agreement
- Comprehensive agreement

Guarantor
Will a 3rd party guarantee the tenant’s financial obligation?
- Yes
- No
Type of Guarantee?
- Guarantor will sign the lease
- Guarantor will sign separate Personal Agreement
- Guarantor will sign a separate Indemnity Agreement (strongest)
Guarantor Details
Name:
Type:
Street Address:
City:
State:
ZIP code:
Phone #:
Fax #:

Permitted Use
The landlord agrees to rent the property to the tenant only for the following permitted use:
(e.g. restaurant, office, retail store, medical office, dental office, beauty salon,
insurance agency, etc.)
Will the tenant be protected from direct competition on the property (exclusive use)?
- Yes
- No

Parking
Will the tenant receive parking privileges?
- Do not specify
- Yes
- Yes, include description
- No
Parking Description:
(e.g. stall #323 and #324)
Will the tenant receive exclusive access to the parking area?
- Yes
- No
Is there a specific number of parking stalls?
- Yes
- No
Number of parking stalls:

Lease Term
Lease start date:
MM slash DD slash YYYY
The lease will:
- End on a set date.
- Have no set end date.
Date lease ends:
MM slash DD slash YYYY
Lease will renew:
- Monthly
- Yearly
Will the tenant be able to move in before the lease start date? (early possession)
- Yes
- No
Possession (occupancy) date:
MM slash DD slash YYYY

Rent Payment
What day of the week will rent be paid?
What day of the month will rent be paid?

(e.g. first, tenth)
When will the first rent payment be made?
What day of the year will rent be paid?
Specify a payment address?
- Yes
- No
Payment Address
Suite/Unit:
Address:
City/Town:
State:
Zip:

Rent Increase/ Late Payments
Do you want to include built-in rent increases?
- Yes
- No
Describe rent increases:
(e.g. First Year - $1000.00, Second Year - $1250.00, etc.)
Do you want to specify late payment charges?
- Yes
- No
Type of late payment charge:
- Fixed charge per late payment
- Fixed charge per day late
- % of Rent
- Other
Amount of late charge:
Amount of late charge:
Amount of late charge:
Please enter a number from 0 to 100.
Describe the late payment charge:
(e.g. $25.00 plus $2.50 for each day after the fifth day late)

Taxes
Will the tenant be responsible for paying any taxes resulting from their use of the property?
- Do not specify
- Yes
Will the tenant pay any taxes directly to the landlord?
- Do not specify
- Yes
Tenant is to pay which taxes directly to the landlord?
(e.g. sales and use taxes)
Those taxes are:
- Included in rent
- In addition to rent
Will the tenant pay any taxes directly to the government?
- Do not specify
- Yes
Tenant is to pay which taxes directly to the government?
(e.g. business licence fees, etc.)

Insurance Provisions
Would you like to customize the standard insurance clauses?
Landlord Insurance
- Standard clause
- Customize wording
- Do not include
Tenant Insurance
- Standard clause
- Customize wording
- Do not include
Revise Landlord Insurance Wording:
The Landlord will take out or cause to be taken out and keep or cause to be kept in full force and effect during the whole of the term: (a) extended fire and extended coverage insurance on the Building, except foundations, on a replacement cost basis, subject to such deductions and exceptions as the Landlord may determine; such insurance will be in a form or forms normally in use from time to time for buildings and improvements of a similar nature similarly situate, including, should the Landlord so elect, insurance to cover any loss of rental income which may be sustained by the Landlord; (b) boiler and machinery insurance of such boilers and pressure vessels as may be installed by, or under the exclusive control of, the Landlord in the Building (other than such boilers and pressure vessels to be insured by the Tenant hereunder); and (c) comprehensive general liability insurance against claims for bodily injury, including death and property damage in such form and subject to such deductions and exceptions as the Landlord may determine; provided that nothing in this clause will prevent the Landlord from providing or maintaining such lesser, additional or broader coverage as the Landlord may elect in its discretion.
Revise Tenant Insurance Wording:
The Tenant will, during the whole of the term and during such other time as the Tenant occupies the Premises, take out and maintain the following insurance, at the Tenant's sole expense, in such form as used by solvent insurance companies in the jurisdiction where the Premises are located: (a) Comprehensive general liability insurance against claims for bodily injury, including death, and property damage or loss arising out of the use or occupation of the Premises, or the Tenant's business on or about the Premises; such insurance to be in the joint name of the Tenant and the Landlord so as to indemnify and protect both the Tenant and the Landlord and to contain a 'cross liability' and 'severability of interest' clause so that the Landlord and the Tenant may be insured in the same manner and to the same extent as if individual policies had been issued to each, and will be for the amount of not less than $1,000,000.00 combined single limit or such other amount as may be reasonably required by the Landlord from time to time; such comprehensive general liability insurance will for the Tenant's benefit only include contractual liability insurance in a form and of a nature broad enough to insure the obligations imposed upon the Tenant under the terms of this Lease. (b) All risks insurance upon its merchandise, stock-in-trade, furniture, fixtures and improvements and upon all other property in the Premises owned by the Tenant or for which the Tenant is legally liable, and insurance upon all glass and plate glass in the Premises against breakage and damage from any cause, all in an amount equal to the full replacement value of such items, which amount in the event of a dispute will be determined by the decision of the Landlord. In the event the Tenant does not obtain such insurance, it is liable for the full costs of repair or replacement of such damage or breakage. (c) Boiler and machinery insurance on such boilers and pressure vessels as may be installed by, or under the exclusive control of, the Tenant in the Premises. (d) Owned automobile insurance with respect to all motor vehicles owned by the Tenant and operated in its business.
Minimum amount of required tenant insurance:

Landlord Improvements
Will the landlord be required to make any improvements to the property?
- Yes, specify now
- Yes, specify in an attached list
- No
Landlord Improvement
First Landlord Improvement
Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
- Add another landlord improvement
Second Landlord Improvement
Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
- Add another landlord improvement
Third Landlord Improvement
Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
- Add another landlord improvement
Fourth Landlord Improvement
Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
- Add another landlord improvement
Fifth Landlord Improvement Describe the improvement in detail: (e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
Fifth Landlord Improvement

Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
- Add another landlord improvement
Sixth Landlord Improvement Describe the improvement in detail: (e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)
Sixth Landlord Improvement

Describe the improvement in detail:
(e.g. Prior to the Tenant taking possession of the Property, the Landlord will install a standard interior door with a deadbolt at the rear entrance of the building.)

Personal Property Provided by Landlord
Will the landlord provide any movable property (chattels)?
- Do not specify
- Yes
- No
Chattel Details
First Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)
- Add another chattel
Second Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)
- Add another chattel
Third Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)
- Add another chattel
Fourth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)
- Add another chattel
Fifth Chattel Describe the movable property in detail: (e.g. Whirlpool dishwasher serial #AV3444)
Fifth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)
- Add another chattel
Sixth Chattel Describe the movable property in detail: (e.g. Whirlpool dishwasher serial #AV3444)
Sixth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444)

Tenant Improvements
Will the tenant be allowed to make improvements to the property?
- Do not specify
- Yes, with the landlord's written consent
- Yes, specify permitted improvements
Tenant Improvement
First Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
- Add another tenant improvement
Second Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
- Add another tenant improvements
Third Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
- Add another tenant improvements
Fourth Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
- Add another tenant improvements
Fifth Tenant Improvement Describe the permitted improvement in detail: (e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
Fifth Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
- Add another tenant improvements
Sixth Tenant Improvement Describe the permitted improvement in detail: (e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)
Sixth Tenant Improvement
Describe the permitted improvement in detail:
(e.g. The Tenant may replace the flooring in the kitchen provided the Tenant obtains the Landlord's prior consent as to materials to be used.)

Movable Property Provided by Tenant
Will the tenant provide any movable property (chattels)?
- Do not specify
- Yes
- No
Chattel Details
First Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)
- Add another chattel
Second Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)
- Add another chattel
Third Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)
- Add another chattel
Fourth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)
- Add another chattel
Fifth Chattel Describe the movable property in detail: (e.g. Whirlpool dishwasher serial #AV3444.)
Fifth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)
- Add another chattel
Sixth Chattel Describe the movable property in detail: (e.g. Whirlpool dishwasher serial #AV3444.)
Sixth Chattel
Describe the movable property in detail:
(e.g. Whirlpool dishwasher serial #AV3444.)

Signing Incentives
Will the tenant receive a signing bonus?
- No
- Yes, free rent for a limited period
- Yes, specify customized terms
The tenant will receive
month(s) of free base rent.
Describe the signing bonus:
(e.g. $500 improvement allowance for paintings)

Additional Clauses (Optional)
You can add additional clauses if there are some information, details, terms or
restrictions that the lease doesn't have but you wish to include. In most leases, this
is not necessary.
- Add a clause
Additional Clause
First Additional Clause
Additional Clause
- Add another clause
Second Additional Clause
- Add another clause
Third Additional Clause
- Add another clause
Fourth Additional Clause
- Add another clause
Fifth Additional Clause
- Add another clause
Sixth Additional Clause
- Add another clause
Seventh Additional Clause
- Add another clause
Eighth Additional Clause

Required Notice before Evicting Tenant
How many days written notice is the landlord required to give
before evicting the tenant for the following breaches:
Failure to pay rent when due:

days
Any other lease breaches:

days

Lease Renewal
Will the tenant have the option to renew the lease?
- No option specified
- Yes, same terms except rent renews at market rates
- Yes, same terms
- Yes, revise standard clause
Revise the following to suit your needs:
Upon giving written notice no later than 120 days before the expiration of the term of this Lease, the Tenant may renew this Lease for an additional term. All terms of the renewed lease will be the same except for any signing incentives/inducements and this renewal clause.

Signing Details
Agreement to be signed?
- Today
- This Month
- Unsure
- Specify Date
MM slash DD slash YYYY

Skip this step for now

What Do You Know About The Commercial Lease Agreement in Alabama?

Anyone with a business knows that leasing commercial property is cheaper than buying an entire floor. Other than the low initial capital requirement, leasing offers more fluidity, and you have better access to otherwise unavailable amenities. But, there’s one catch: the costs could go up in a few months or years if you fail to read through all the terms of your commercial lease agreement in Alabama. As the landlord, renter or lessor, spelling out all your terms saves you future legal trouble.

What is a Commercial Lease Agreement?

It is a legal contract agreed upon by a landlord and a tenant or the lessor and the lessee. It is also called a commercial real estate lease, a business lease, or a commercial property lease. Once signed, this document will give the tenant the right to use the specific property for named commercial or business activity, for a specific duration and in exchange for money. The lease will also outline the responsibilities and the rights of both the landlord and the tenant in the entire duration of the lease, as well as other pertinent information like rent and the name of the tenant’s guarantor.

As a business owner interested in that prime office space, you need to ensure that you read and even question the terms of your Alabama commercial lease agreement. You also need to know the specifics of a standard commercial property lease agreement. However, before we look at the details, let’s understand which are the main types of lease contracts for commercial property in the market?

Types of commercial leases

Gross / Full Service Lease

Under this lease, the tenant’s responsible for the rental rate which includes all the operating expenses or the real estate taxes. Note that the landlord could reserve the right to pass down future increases in operating expenses.

Net Lease

Under this contract, the tenant bears all the costs associated with the property, on top of the rent. So, the tenant also pays the pro rata portion of the property tax, common area maintenance (CAM), and property insurance.

There are three types of net leases: Triple Net Lease, Double Net Lease, and the Single Net Lease.
- Triple Net Lease: the tenant pays the property taxes, CAM, and Property Insurance
- Double Net Lease: tenant pays property taxes and the property insurance
- Single Net Lease: the tenant only pays the property taxes in addition to rent.

Modified Gross Lease

This is a hybrid between the gross and the net lease, and the operating expenses are shared/ negotiated between the landlord and the tenant. The tenant covers the base rent and the CAM, and the landlord covers the rest.

Percentage Lease

Here, the tenant will pay the base rent and a percentage of gross revenue the business’ operating expenses associated with the use of the space.

Note: these types of leases bear different terms. The terms of your commercial lease agreement in Alabama will include:

Fixed end date lease: this lease specifies the exact date that marks the end of the tenancy period. With the predetermined lease duration, the rent cannot be raised during that time, and no other changes can be made to the lease unless stated in the lease.

Fixed number or Years/ Months/ Weeks: this lease will specify the lease duration as weeks, years, or months. The tenancy period lasts for as long as the tenant, and the landlord agree. Rent increase cannot be initiated during that period unless mentioned in the document.

Periodic lease: this lease could run for weeks, months or even years and will run until either party decides to terminate the lease. Month-to-month leases are the most common types of periodic leases.

Automatic renewal lease: with this kind of agreement, the duration of the lease will continue running as per the agreed terms until the tenant or the landlord issues a notice for the termination of the contract. Here, the contract runs under the terms agreed upon when initiating the contract.

Statutory Requirements For a Commercial Real Estate Lease in Alabama

The agreement must be created according to the state laws under Title 7 and Article 2A. Also, it is a requirement to have a rental application which should be prefilled by the potential tenant for verification of their business credit, the finances of the business principal, as well as the source of income.

For new businesses or the ones with few assets, the state requires that the lessee has a personal guaranty making the business entity’s owner the entity that shoulders all the responsibility for the performance of that lease contract.

Elements of the Complete Commercial Property Lease Agreement

First, you should reach a verbal consensus on critical issues like the term of the lease, base rent, and renewal options.

Next up, in the header area of the document, input the legal names and addresses of the lessor (landlord) and the lessee (tenant/ renter). Once you have these details, you need to input these other details in the sections outlined in the statutes.
- Section 1: The description of the leased property
- Section 2: The use of the leased property
- Section 3: The Terms of the lease
- Section 4: The option to renew – this is optional
- Section 5: Rent and Other expenses. This is one of the most important parts of the contract, and you need to identify the type of lease you agree to. The type of lease could be gross, triple net (NNN), or modified lease.
- Section 6: this covers the security deposit.
- Section 7: Leasehold improvements – incorporate the changes that the lessee can make.
- Section 13: Default (actions to be taken and penalty charged for late payment
- Section 17: Miscellaneous like the details of the municipality
- Section 22: Tenant and landlord contact information for all legal notices

Other essentials of the lease include parking, the addition of signs, terms of assignment and subleases, utilities, entry allowances, condemnation, quiet possession, notice, and subordination.

Lastly, the lease must bear the signatures of the landlord and the tenant. If the lease is for a large-scale lease, you should have the document notarized at the notary public, with both parties present.

It’s important to note that both parties should have an original copy of the document after signing or notarization. After execution, the lessee has to pay the security deposit to receive access to the space.

Wondering if you can skip The Agreement and Agree Verbally?

No, you shouldn’t. In the absence of the agreement, both the landlord and the tenant will suffer immensely, financially and mentally.

If you are interested in a professionally drafted commercial lease agreement form in Birmingham, Mobile, Huntsville, Montgomery, Tuscaloosa, Auburn, or any other city in Alabama, get started with our free commercial lease form today!

Step 1 of 30

Create your Commercial Lease Agreement

Customized Lease

Landlord Details

Landlord

First Landlord

Second Landlord

Third Landlord

Fourth Landlord

Tenant Details

Tenant

First Tenant

Second Tenant

Third Tenant

Fourth Tenant

Guarantor

Guarantor Details

Leased Property

Property Location

Permitted Use

Parking

Lease Term

Rent Details

per month

per week

every 3 months

per year

Rent Payment

Payment Address

Rent Increase/ Late Payments

Utilities and Other Expenses

Who is responsible for paying the following utilities?

Maintenance

Maintenance that the tenant is to perform or pay for:

Operating Costs

Who is responsible for paying the following operating costs for the property?

Property or Use Taxes

Taxes

Deposit Details

Insurance

Who is responsible for obtaining and paying for the following insurance?

Insurance Provisions

Would you like to customize the standard insurance clauses?

Landlord Improvements

Landlord Improvement

First Landlord Improvement

Second Landlord Improvement

Third Landlord Improvement

Fourth Landlord Improvement

Fifth Landlord Improvement

Sixth Landlord Improvement

Personal Property Provided by Landlord

Chattel Details

First Chattel

Second Chattel

Third Chattel

Fourth Chattel

Fifth Chattel

Sixth Chattel

Tenant Improvements

Tenant Improvement

First Tenant Improvement

Second Tenant Improvement

Third Tenant Improvement

Fourth Tenant Improvement

Fifth Tenant Improvement

Sixth Tenant Improvement

Movable Property Provided by Tenant

Chattel Details

First Chattel

Second Chattel

Third Chattel

Fourth Chattel

Fifth Chattel

Sixth Chattel

Signing Incentives

Customize Standard Clauses

Additional Clauses (Optional)

Required Notice before Evicting Tenant

Lease Renewal