Delaware Commercial Lease Agreement

A Delaware commercial lease agreement is a binding contract for a tenant to lease retail, office, or industrial space. The agreement sets the responsibilities and rights for both landlords and tenants, as well as details about rent, deadlines, penalties and other items.

The Delaware law that governs commercial leases is Delaware Code Title 25, Part IV. These types of leases are longer and more complicated than a residential lease, so consulting with a lawyer is advisable.

Delaware Commercial Lease Requirements

The following are Delaware-specific requirements pertaining to commercial lease: [1]

• No Surcharges Allowed on Utilities: If a landlord purchases services from a public utility and redistributes them to tenants and meters a tenant’s use of services, the landlord may only charge the tenant the same amount as would be charged by the direct metering of the public utility
• Limit of Liability for Assets Pledged: If a tenant pledges goods, personal property, crops, or other assets as security for paying the rent and fails to pay the rent, the landlord is limited to the maximum amount of damages of one year’s rent, if the assets are attached by judgment or otherwise and then sold to pay the liability.
• Confession of Judgment Prohibited: A “confession of judgment” is legal terminology that means a tenant agrees in advance to accept liability for a certain thing for a certain dollar amount. Then the landlord can enter as a judgment with the court without needing to have any other legal proceedings. This type of provision is prohibited and not enforceable under Delaware law.
• Taxes Paid by Tenant: Taxes are generally the landlord’s responsibility (unless otherwise specified in the contract). If the tenant pays the taxes, the amount paid can be deducted by the tenant from the rent amount. The taxes can also be recovered from the landlord if the rent amount is insufficient.

Writing a Delaware Commercial Lease Agreement

Here is a checklist of how to create a commercial lease agreement in Delaware.

1. Enter the names and the contact information for the parties.
2. Enter the address and physical description of the rental property.
3. Describe the authorized use of the premises and list any use restrictions.
4. Give the lease terms in the number of years or months.
5. State the start date and end date of the lease.
6. If the lease allows an option to renew, list the renewal terms including any rent increase.
7. List the monthly rent amount and the day of the month the rent is due.
8. List acceptable payment methods and where the rent should be paid. If checks are accepted as payment for rent, list the amount of the fees charged for a check returned unpaid by the bank.
9. List the day that rent payment will be late and the late penalty fees.
10. Describe the terms and the conditions of the payment of expenses under the lease and whether it is a gross lease, a modified gross lease or a triple net lease according to the details explained above.
11. List the amount of the security deposit and describe the procedures for its refund after lease termination.
12. If improvement or alterations are allowed, describe who pays for them and if there is a requirement of returning the property to the original conditions when the lease is terminated.
13. Enter any restrictions, imposed by the municipality or otherwise, on exterior signs if they exist.
14. Add any special provisions that relate to the specific rental property.
15. List the addresses and methods to be used for legal notices given by one party to the other one.
16. Have a place for the parties to print their names, date, and sign the agreement.
17. Have a place for the agreement to be notarized.
18. Give a signed copy of the agreement to all parties.