Commercial Lease Agreement Template

COMMERCIAL LEASE AGREEMENT

A commercial lease agreement is a legally binding document that allows a tenant to rent a business-related property, such as an office, retail, or warehouse. It specifies the tenant’s right to use the property in exchange for rent and, maybe, additional fees such as running costs, taxes, maintenance, and parking. The agreement specifies the rights and duties of both the landlord (owner of the commercial property) and the tenant.
As long as the renter follows the terms set, they are entitled to conduct business on the property. Furthermore, it is customary for a business leasing application to be completed prior to signing the agreement. This application process allows the landlord to analyze a potential tenant’s creditworthiness and suitability for the business space.
What are the different types of commercial lease?
Commercial leases generally fall into two categories. The first type of commercial lease is when a business rents a portion of a landlord’s property that houses multiple commercial tenants. The second type of commercial lease is when a business rents an entire property from a landlord. This document can be used for either of these situations.

Legal Framework for Commercial Leases in Nigeria

Commercial leases in Nigeria are governed by a mix of statutory law, case law, and contractual principles. The primary statutes include:

• Tenancy Laws of States
  Each state in Nigeria has tenancy or rent control laws (e.g., Lagos State Tenancy Law 2011), which apply to leases within their jurisdiction. These laws regulate notices, rent increases, recovery of premises, and dispute resolution.

• Land Use Act 1978
  The Act vests all land in each state in the governor, who holds it in trust for the people. This means leases longer than three years must be in writing, signed, and usually registered to be valid against third parties.

• Property and Conveyancing Law (PCL) and Conveyancing Act
  These apply in some states, especially in the southern parts of Nigeria, and regulate lease creation, rights, and remedies.

• Contract Law Principles
  The Law of Contract applies, since a lease is fundamentally an agreement enforceable by law. Rules of offer, acceptance, consideration, and intention to create legal relations all apply.

What is the difference between a commercial lease and a residential lease?
Though both documents are meant to facilitate a landlord and tenant arrangement, they are used in different situations. A commercial lease is used when the tenant plans to do business in the space they are renting. A residential lease agreement is used when the tenant plans to live in the space they are renting. Each type of lease includes provisions specific to each of these purposes.