The Maine commercial lease agreement is a binding contract between a landlord and a business owner. This written document allows the business owner to use a commercial space for business purposes in exchange for rent. It outlines the terms and conditions associated with renting and maintaining the property.
Maine Commercial Landlord/Tenant Law
- According to statute §6038, the landlord will need to disclose the bank and the account where the security deposit is being held.
- Radon testing must be completed in residential and commercial buildings every 10 years; proof of this testing must be provided to the tenants.
- Lead-based paint is something that must also be disclosed. Specifically, the possibility of any building that was constructed before 1978 may have used lead-based paint at some time.
- The different expenses that need to be covered for the building need to be addressed in the lease. The landlord may cover some of the utilities, but who takes care of the taxes and the insurance for the property. Depending on the type of rental agreement that the landlord and the tenant agree to, this could differ.
- Any property that was used to store hazardous material must be disclosed to new tenants before they agree to rent the property.
When a business owner needs a place for their business to be located, most will look into getting a commercial lease that will accommodate their needs. A commercial lease is something that is similar to a residential lease, but it differs because it is designed to do business on the property, so there may be other concerns that are addressed in the lease.
Most commercial leases tend to have a longer term than a residential lease, so the business will have the security of being able to be in the same location when they are doing well. These tend to be very stable lease options for both the tenant and the landlord. To find the best option for the rental relationship, the parties involved will want to decide which type of commercial lease will work best for them. The different options include:
- A Triple-Net Lease – This is a type of commercial lease that is more beneficial to the landlord because it requires the tenant to pay the majority of the costs of the property. With that being said, the tenant will also have more control over what is done in the unit insofar as renovations and repairs. The tenant will be responsible for paying the rent, the insurance on the building, and the taxes on the unit.
- A Gross Lease – This type of lease is designed to be more financially viable to the tenant because it will only require them to pay the rent for the unit. The landlord will take care of the insurance, the taxes, and the maintenance concerns of the unit. Because of this, the rent price of this type of rental may be slightly higher.
- A Modified Gross Lease – This is a type of rental arrangement that will allow the tenant and the landlord to split the building expenses so that it is agreeable to both parties. This will allow the expenses to be divided so that no one is responsible for all of them.
- A Percentage Lease – This is a type of commercial lease that is often used for businesses. The tenant will need to pay the rent for the property, but it is often a smaller amount that will not be too hindering when the business is not doing well. When the business is thriving, the tenant will need to give the landlord a certain percentage of what they make as profit.
Maine Commercial Lease Disclosures
In the state of Maine, there are some disclosures that the tenant must be given when they are looking to start a new rental relationship. These disclosures include:
Lead-Based Paint Disclosure
When a building was designed before the year 1978, the landlord is required to disclose that there is a possibility that lead-based paint was used on the property. This can be hazardous to small children and pregnant women, so it must be disclosed before the rental agreement is signed.
Radon gas is something that could exist on any property that is rented, so to make sure that it does not exist, the landlord will need to have an inspection completed every 10 years. The landlord must also disclose the presence of radon gasin the residential lease agreement.
Security Deposit Location Disclosure
In the state of Maine, the landlord will need to inform the tenant where their security deposit is being held. This should include the name of the financial institution as well as the account where it is located.
Additional Lease Considerations
Some of the other sections that should be considered in a commercial lease include:
- Subleasing Policies – Most commercial properties do not allow the tenants to sublease the property without the permission of the landlord. If there are rules about subleasing the property, make sure to include them.
- Storage Policies – Since this is a business, there may be a need to store merchandise on the premises. If there are any rules pertaining to the type of material that can be stored on the property, they need to be listed here so that the landlord is not liable for anything that I explosive or illegal.
Writing a Commercial Lease
Some of the information that will need to be in any commercial lease agreement includes:
When writing this document, the first part of information that needs to be included is the names of the parties that are signing the agreement. In addition to the names of the tenant and the landlord, the name and phone number of the business that will be operating in the building will need to be listed as well. If there is a management company that takes care of the day-to-day functions of the building, their name and contact information should be noted in the document as well.
The next section of the document will need to cover the address of the property that is being rented. In addition to the physical address, make sure to include the county, the zip code, and any cross streets that will help to identify the unit.
Terms of the Lease
Next, make sure to lay out the terms of the lease fully. This will include the amount of rent that is due each month as well as the length of time that the tenant will have use of the property. Include the renewal process as well in case the tenant wishes to renew the contract to continue doing business in the same location.
Utilities and Expenses
Depending on the type of commercial lease that is signed, the tenant may have to take care of paying for the utilities in the building. Standard utilities that they will need to cover include electric, water, phone, and gas. If any of these bills are covered by the landlord, they will need to be listed here as well as properties where businesses share metered utility costs.
The final section of any legal document is going to be the part where both parties sign and date the document. Since this is a business agreement, the agreement should be notarized, but in the state of Maine, it is not required.