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Read further to learn more about commercial lease agreements in Kansas, such as what disclosures are required and what else should be included.
What is a Commercial Lease Agreement?
A commercial lease agreement is a legally binding contract between a landlord who owns a commercial property and a tenant who wishes to rent the commercial property with the intention to operate a business. The commercial property being rented generally falls into a retail, office or industrial space category.
In the state of Kansas, anyone who wants to do any type of business on the property that they are renting will need to have a commercial lease agreement. When considering this type of agreement, there are three different options to select from, which include:
- A Gross Commercial Lease – This is a type of agreement where the landlord is responsible for covering the cost of every expense that comes up for the property. The only thing that the tenant is going to be responsible for is paying the agreed upon rental amount that is due each month.
- A Modified Gross Commercial Lease – This is the type of agreement where the landlord and the tenant sit down to split the cost of the expenses on the property. Typically, the different agreed upon that will be due each month are evenly split before the agreement is signed and dated.
- A Triple Net Commercial Lease – This is the type of arrangement that is designed to benefit the landlord, so the tenant is going to be responsible for paying all of the property expenses including the monthly rent that is agreed upon.
Disclosures, Disclaimers, and Additional Concerns
When a lease agreement of this type is written up for a new tenant, it is going to be a little different than a residential lease, which means that some of the disclosures and disclaimers that apply to the property will need to be addressed.
Use of Premise
Any time that this type of lease is used for a rental agreement, it is important that the landlord specifies what the property will be used for. This means that the business can be listed as an office, a retail store, or a restaurant. Whether the property is going to be used for one type of business or a few, the details of what is going to happen in the space will need to be placed in the contract.
Any type of business that is not stated here that is done in the rented unit will be considered a breach of the contract. In most cases, the landlord will want to keep a narrow explanation of what goes on in the unit so that they are not held liable if the zoning regulations of the state are not met. A tenant is going to prefer to have a wider range of activities so that they have more freedom in what they can sell.
Food Use Rider
In the state of Kansas, there are a lot of rules and regulations that a business that serves food needs to follow. If the business that is renting the unit is going to be serving food or drinks, make sure that the state laws are included with the agreement so that the tenant can make sure that they are not in violation of the contract.
When a new tenant decides to do business in a new location, the floor plant of the unit may not match up to what they are looking for. When this is the case, the landlord will often allow the tenant to make alterations to the property. In addition, this initial build-out period will allow the tenant to make alterations to fit the needs of the commercial space. During this time period, the landlord may not require the tenant to pay rent. Any improvements that need to be made after the initial build-out period, the tenant may be required to get permission from the landlord to do them.
Writing a Kansas Commercial Lease Agreement
When writing this type of lease agreement, the information that needs to be included is:
The first thing that should be seen in this in this document is the information about the parties that are going to be entering into the agreement. It will need to have a section for the landlord and the tenant’s full name as well as the name of the business that will be located in the unit. Also, make sure to include a phone number where both parties can be reached.
In this section, begin by listing the full address of the property that is being rented including any floors or building numbers that apply to the unit. Then, lay out the terms of the lease starting with the date and the number of years that the agreement is for. Also, make sure to include the amount of rent that is due each month and the security deposit that the tenant will have to pay for the property before they move their business into the unit. The renewal terms will also need to be included in the document as well, which will typically allow the tenant a period of 90 days before the final date of the agreement in which they will be required to process the renewal.
Utilities and Expenses
Depending on the type of lease agreement that is written up, the landlord or the tenant may be responsible for paying the utilities and the other expenses of the building. All of the expenses should be written in this document somewhere and the party that is going to be responsible for paying for it.
When a business is operating out of a unit that they have rented, they are going to need to have parking spots for their employees and their customers. Before signing the agreement, make sure that the number of parking spaces that the tenant needs are available for them, and maybe provide an additional parking lot for the tenant to use. Sometimes, the landlord will charge a small fee for additional parking spaces.
Once all of the information has been written on this document, and it has been reviewed and agreed upon by the landlord and the tenant, the final section is the signature section. In addition to the signature and the printed name of both individuals, a line for the date will need to be placed in this section. If a guarantor is required for the rental, their information will need to be provided in this section as well.