Ohio Commercial Lease Agreement Template
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An Ohio Commercial Lease Agreement is fundamentally a bilateral contract between you and your property owner. This covenant affords you the privilege to utilize a premise for your trade activities, for a mutually agreed duration and cost. It's customized to fit the exact operations your enterprise plans to execute within. Ensure you grasp every aspect of it prior to affixing your signature.
What are the related laws for Commercial Lease Agreements in Ohio?
Chapter 1310 specifically of the Ohio Revised Code expressly addresses leases. This introduces a range of procedures, descriptors, and clauses that supervise the creation, alteration, execution, and violation of lease contracts.
As mentioned in certain parts of the article:
- Section 1310.12 presents definitions, enumerating various phrases linked to lease contracts along with their corresponding explanations.
- Section 1310.15 manages scenarios related to adjustments, shedding light on when and under which terms adjustments from commodities occur.
- Section 1310.16 sets up the statute of limitations to resolve conflicts associated with lease contracts. It puts forward that the parties can diminish the limitation duration to a minimum of a year.
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How to write a Commercial Lease Agreement
As an entrepreneur, the intricate legal language might appear intimidating. Nonetheless, armed with a transparent game plan and proper advice, you can fearlessly create your lease agreement. Let's delve into the basics of a commercial lease agreement, and how to custom-fit it to your requirements - think of this as your amicable, simplistic guide to steering the realm of commercial leases.
1. Permitted Uses
The "Sanctioned Uses" stipulation guides you on utilizing the leased premises. It lucidly details the approved actions. These encompass industrial operations, administrative tasks, warehousing, dissemination, and the fabrication and circulation of goods.
Recording all your projected business processes in this section is vital. Such lucidity aids in averting potential legal complications and warrants effective resource usage. Incorporate every nuance to alleviate unanticipated surprises down the road. This comprehension keeps your business aligned and set on its course.
Industrial and light manufacturing, warehousing, office, distribution, and assembly, including designing, manufacturing and distributing branded merchandise and promotional products, including all activities incident or ancillary thereto and all other lawful uses and purposes.
2. Term and Option to Extend
(a) Concerning the lease duration and prolongations, it commences on the Initiation Date and concludes on the Termination Date. You have the option to prolong it for an additional two two-year terms under equivalent conditions, although the rent might escalate. To extend, make sure to alert the landlord in writing 30 days prior to the term's conclusion.
(b) "Term" alludes to both the initial duration of your lease and any subsequent extensions.
Unambiguous lease terms are integral to strategic business planning and operations, as well as considering possible extensions.
(a) The initial term of this Lease will commence on the Effective Date and expire on the Expiration Date. The Tenant may extend the Term of this Lease for [two] additional [two]-year extension term(s), on all the same terms and conditions (except for Rent, which will increase during extension Terms as provided below) contained in this Lease, by notifying the Landlord in writing of the Tenant’s election to do so not less than 30 days before the expiration date of the then-current Term, as the case may be.
(b) The initial term and any applicable extension term are referred to in this Lease as the “Term.”
3. Repairs and Maintenance
The "Repairs and Maintenance" section explains who's in charge of fixing issues. It encompasses both internal and external concerns, such as dysfunctional piping or impaired stonework. Responsibility for the expenses lies with the landlord, not you.
Should a repair not be resolved promptly, you have the option to arrange the repair and deduct the cost from your rent. It's essential to keep records of these occurrences for later reference. This provision is critical, as it outlines repair duties and safeguards you from unanticipated costs.
From and after the Effective Date, and for the remainder of the Term, the Landlord shall perform ordinary maintenance and repair of the interior of the improvements on the Premises. In addition, the Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to, the exterior walls, building slabs, foundations, structural parts and components, parking lots, gutters, downspouts, roof, roof membrane and coverings and any other part, component or system on the exterior of the Premises. The Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to the sprinkler system, mechanical, HVAC, electrical and plumbing systems of the Premises. If the Landlord fails to perform any repair or replacement required to be made by the Landlord in this Lease, and the Landlord fails to cure such failure within 15 days after receipt of a written demand from the Tenant (or immediately, in the case of emergency repairs, including loss of heating and air conditioning), then the Tenant may make such repair or replacement and the Landlord shall reimburse the Tenant for the cost thereof. If the Landlord fails to pay such amount, then the Tenant may offset against the Rent due hereunder the amount so expended.
4. Alterations
"Modifications" explicates your rights to adapt the leased area. You're allowed to enforce changes without landlord's approval, yet extensive modifications get integrated into the landlord's property. Feel at liberty to extract personal assets such as shelving or equipment as far as it doesn't cause harm to the premises. Gaining insight into this provision can ward off conflicts and aid you in strategizing your business arrangement optimally.
The Tenant may, at its own cost and expense and in a good workmanlike manner, make such alterations, additions, or improvements or erect, remove, or alter such partitions, or erect such racks, shelves, bins, machinery, furniture, fixtures, trade fixtures, equipment, and other personal property as it may deem advisable, without the consent of the Landlord. All fixtures and permanent alterations, additions, improvements, and partitions erected by the Tenant will be and remain the property of the Landlord during the Term, and will be abandoned by the Tenant at the expiration of this Lease. All racks, shelves, bins, machinery, furniture, equipment, and other personal property located in the Premises as of the Effective Date or otherwise installed by the Tenant may be removed by the Tenant at any time if the Tenant so elects. All such removals and restoration shall be accomplished so as not to damage the primary structure or structural qualities of the buildings and other improvements situated on the Premises.
5. Insurance
The "Insurance" provision ensures safety for both lessee and landlord. As the lessee, it's essential to have property and liability insurance, including the landlord as an additional insured. Damage to the premises' insurance is the landlord's responsibility.
'Subrogation waivers' prevent insurance providers from pursuing the other party following a loss. Your insurance firm should give the landlord a 30-day heads-up prior to the policy's termination. Comprehending these terms provides financial security for your enterprise.
(a) At all times during the Term, the Tenant shall maintain, at its sole cost and expense, policies of insurance containing the following insurance coverages (which policies shall name the Landlord as an additional insured):
(1) Property insurance with premiums paid in advance insuring the Tenant’s property using the standard Special Causes of Loss Form or equivalent for the full replacement value. The foregoing is referred to in this Lease as “Property Insurance.”
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(2) Commercial general liability insurance with respect to the Premises in amounts not less than $1,000,000 per occurrence, $2,000,000 aggregate limit using current ISO forms or equivalent.
(b) The Landlord shall obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having a lien on the Property), and special extended perils ("all risk" as such term is used in the insurance industry). Such insurance must provide for a payment of loss thereunder to the Landlord or to the holder of mortgages or deeds of trust on the Premises.
(c) The policies required by this section must provide for standard waivers of any right of subrogation that the insurer of such party may acquire against the other party to this Lease, for losses that are actually insured against, even if the loss results from a negligent act or omission. The Tenant’s insurance company must provide the Landlord with a certificate of insurance on form ACORD-27 (for Property Insurance required to be carried under this Lease), or its equivalent, and ACORD-25 (for liability insurance required to be carried under this Lease), or its equivalent, which provides that the insurance may not be cancelled without giving the named insured at least 30 days’ prior written notice (or at least ten days’ written notice of cancellation in the event of the non-payment of premium). The Tenant may carry any required insurance under a blanket policy if that policy complies with the requirements of this Lease.
6. Events of Default
The "Instances of Default" provision enumerates behaviors that are identified as violations of your lease. Habitual incidents comprise of overlooking rental dues, encountering financial instability, or neglecting to comply with lease stipulations. Stay cognizant of this part and evade these obstacles to uphold a positive rapport with your landlord and facilitate unimpeded business operations[1%5E].
The following events will be deemed to be Events of Default by the Tenant under this Lease:
(1) The Tenant fails to pay any installment of the Rent hereby reserved when due, or any other payment or reimbursement to the Landlord required under this Lease when due, and such failure continues for a period of 30 days after the Tenant’s receipt of written notice of such nonpayment;
(2) The Tenant becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors;
(3) The Tenant files a bankruptcy petition or Tenant is adjudged bankrupt or insolvent in proceedings filed against the Tenant;
(4) A receiver or trustee is appointed for all or substantially all of the assets of the Tenant; and
(5) The Tenant fails to comply with any term, provision, or covenant of this Lease (other than the foregoing in this section 18), and does not cure such failure within 30 days after written notice thereof to the Tenant, or such longer period as may be necessary to cure such default provided the Tenant has promptly commenced curing such default and is diligently proceeding to obtain such cure.
7. Holdover
The "Occupancy Overtime" section addresses scenarios when there's an overextension of your lease. Should you fail to vacate upon the completion of your lease term, you're subject to pay 125% of your standard rent for every subsequent month of holdover. It's crucial to grasp the expenses linked with overstaying and formulate your termination strategy accordingly.
If the Tenant holds over after the expiration of the Term and does not surrender the Premises prior to the expiration of the Term, then for each such month that the Tenant is holding over, the Tenant shall pay to Landlord 125% of the Rent due under this Lease for each month.
What happens when a Commercial Lease Agreement expires?
Upon the conclusion of a commercial lease contract, several outcomes could transpire. I've spotted some excellent sources that depict possible scenarios:
- Extend or Conclude: Business renters should opt whether to extend or end their lease arrangement considerably before the termination. Setting this motion 6 to 12 months ahead is deemed ideal.
- Shift to Month-to-Month: If there's no renewal of the original lease or no new lease agreement, transition into a month-to-month tenancy might be feasible, with the landlord's consent.
- Landlord Assumes Occupancy: Occasionally, when a commercial lease concludes, the landlord may elect to utilize the property personally, either for residential or commercial uses.
- Likelihood of Legal Countermeasures: If complications arise around lease termination, say a tenant routinely stalls rent or fails to adhere to the lease's regulations, the lease termination might escalate to legal proceedings.
What are the penalties for breaking Commercial Lease Agreements?
Indubitably, punitive measures for prematurely terminating a commercial lease agreement can diverge, but there are a handful of customary penalties:
- Outstanding Rent: Commonly, one of the key penalties for terminating a commercial lease prematurely is the tenant's responsibility to settle the remaining rent owed as per the lease duration, regardless of vacating the premises.
- Notification Period: Conventionally, most commercial landlords mandate a notification period from 30, 60 up to 90 days when the tenant opts to break the lease.
- Termination Charges and Supplementary Expenses: The lease agreement's specifics may dictate termination charges, whilst sometimes holding the tenant liable for any promotional expenses incurred for locating a new tenant and potential hygiene costs.
- Legal Repercussions: Depending on the breach's context and nature, if internal resolution modes are expended within the lease, the issue may escalate to engaging legal recourse or result in court litigation.
Given that the exactitude of penalties may vary based on the lease agreement, it's crucial to meticulously review the lease contract to comprehend the precise regulations and stipulations pertinent to early termination.