Demetree Real Estate Blog

4 Important Office Leasing Agreement Terms

[fa icon="calendar"] 09.27.2016 / by Rory Williams


Commercial office leases are some of the more complex legal documents out there. Aside from defining the basic terms of tenancy such as rental rates and operating expenses, property owners will need to clarify some of the more complicated terms, such as:

1. Condition of the Premises

This is one of the most important terms of the lease. You and your tenant need to be in complete agreement as to the condition of the premises, so make sure that the lease completely and accurately describes the property.

For example, if you are renting out an entire building, this could be as simple and straightforward as stating the address. However, if you are only renting out just a single unit or portion of the building, it gets more complicated and you’ll need to describe the space in more detail.

It is also a good idea to address access issues, such as where and how your tenant, as well as their employees and customers, find or access the property. You may also want to describe the condition of common areas such as conference rooms, storage areas, and parking.

2. Uses and Exclusivities

This is one of the more complicated aspects of leasing a commercial space that you don’t want to overlook. Use clauses will place restrictions on how your tenants can use the property and what they can use it for. This includes:

  • The types of businesses they can conduct
  • The manner and style of advertising that is allowed (street signs, etc.)

An exclusive helps to ensure that all tenants are treated equally. These types of agreements are often used to ensure that competitors don’t move in next door and are most often given to well-established tenants.

3. Maintenance Costs

Aside from covering the initial questions of who will be paying what bills, it is important to spell out who will be held responsible when certain problems arise and these issues will impact rent prices. For example, if wall paint or flooring needs to be replaced, you should state who will be responsible for these costs. Make sure your language is very clear so there is no room for miscommunication.

4. Terms of Insurance

You may want to require your tenants to carry some basic forms of insurance such as property and/or liability insurance so that you are covered in case of an incident. Also be aware that your tenant may want to protect themselves as well with coverage such as rental interruption or leasehold insurance.

Working with a Property Manager

Although standardized lease forms will include many important terms and conditions, these may or may not cover all your needs as a property owner. Working with a qualified property manager or real estate professional who can help tailor your leasing terms is a great way to ensure that both and your tenants are getting the best deal. Contact Demetree Real Estate to learn more about how we can help you today!


Topics: Leasing

Rory Williams

Written by Rory Williams

Rory is the managing partner of Demetree Real Estate Services, a diversified real estate organization focused on investment, development and real estate services. He has experience running the operations of a private real estate portfolio with 5MM square feet and operations in 8 states.