Maryland Commercial Lease Agreement

Last Updated: January 20, 2023

The Maryland commercial lease agreement is a contract that lays out the terms and conditions associated with renting a commercial space. This document establishes a relationship between the landlord and the tenant (business). Due to the significant expense of a commercial property, these leases are usually longer than residential leases.

Maryland Commercial Landlord/Tenant Law

  • With a commercial lease, both parties enter into an agreement that usually lasts much longer than a residential fixed-term lease. In fact, these typically have terms that span five to 10 years.
  • These also have variable lease breakdowns. Different types of leases may see the landlord and tenant as responsible for varying running expenses like utilities, insurance, and taxes. For example, some may have triple-net leases where the renter may pay not only the rent but also the business expenses of the unit. On the other hand, he or she may also have a gross lease where they only pay the monthly rent.
  • In Maryland, the only disclosure that a landlord is required to provide to the tenant is the federal lead-based paint disclosure. This disclose is valid for properties built before 1978, and it lets tenants know if lead paint, which is harmful to children and pregnant women, was used at any point.
  • Commercial leases should also let the tenant know if modifications to the property are allowed. This can include renovations, larger signage, or business-related add-ons.
  • For legality, the document must also be signed and have the names printed of all involved parties. In addition, the date of the signing must be recorded. Finally, many prefer to get the document notarized as well.

When a person is interested in getting a lease agreement for a business that they own, the commercial lease agreement is the type of document that they will turn to in order to find an option that fits their business needs. In fact, there are several different types of commercial lease agreements that a business owner can opt to have, and each one will have its pros and cons for the business owner and the landlord. 

One of the reasons that a commercial lease is going to be a good option for a business is the fact that most of these arrangements are designed to have a longer span than a residential lease. This means that they will not need to change the location of the business as long as it is doing well. In fact, many commercial leases are designed to last for 10 years or longer, which is far more versatile than many of the residential leases that can be found today. 

Types of Commercial Lease Agreements

Each agreement is going to be unique, which means that they can be designed to be a more stable choice for tenants who need more flexibility. Some of the different types of commercial leases that can be considered include:

  • A Percentage Lease:  This is a type of rental agreement that will take into account how well the business is doing. If the business is not doing the best, they will only need to pay a small rental payment each month, but when the business is thriving, they will be required to pay the landlord a percentage of their earnings each month. This can be a safe option for a business that is just starting out because they will be paying less for rent until they obtain their customer base.
  • A Triple Net Lease: This is a great rental agreement that many businesses consider because it is an arrangement that gives the renter a lot of freedom. The tenant will pay the rent and a lot of the expenses that will add up when it comes to running the business. This means that they are likely to pay the insurance for the space, the taxes, and more, but this will allow the business owner to feel like they are in control of the rental. 
  • A Gross Lease: This is an option that often benefits the tenant because all they will need to pay for the unit is the rent that is owed each month. This means that the expenses that need to be paid for the property like the taxes and the insurance will be covered by the landlord. In some areas of Maryland, the landlord may increase the amount of rent that is required from the tenant, but this is not a crippling amount. 
  • A Modified Gross Lease: Sometimes, the landlord and the tenant will not want to go with any of the other lease options that are available. When this happens, there is an option that will allow both party members to benefit. With the modified gross lease, the amount that is paid by both parties is agreed upon before the lease is signed

Disclosures Required for a Maryland Commercial Lease

With any type of lease in Maryland, there are some disclosures that will need to be given to the tenant before they sign the lease. These disclosures include:

Lead-Based Paint Disclosures

Regardless of the state, there is a federal law that will require that property owners disclose whether or not the unit contains lead-based paint . If the property was built before the year 1978, the possibility of this substance being in the unit will need to be disclosed because it can be hazardous to the health of young children and pregnant females. There are other disclosures that may be provided for the tenant, but they will not be required in the state of Maryland.

Writing a Commercial Lease in Maryland

As with any type of lease, there are going to be things that need to be included in the document before it is signed to make it legally binding. Some of the important sections that will need to be included in the document are:

Party and Property Information

The first section of the lease is going to need to introduce the parties that are going to be signing the lease and taking part in the arrangement. The full name of the parties will need to be included as well as the name of the management company and the name of the business that will be located on the property. In addition to the names of the businesses, a contact number for each should be listed as well. 

The next piece of information that will need to be included in this section will be information on the property. This will need to include the full mailing address for the unit as well as the identifying information about the unit. The floor that it is located on, as well as the unit number, should be included also. 

Terms of the Lease 

The next section is going to lay out the terms of the lease so that they are clearly stated for both of the parties to agree upon. This will include things like the amount of rent that is due each month and some of the rules that the tenant will need to follow while doing business on the premises. Can the tenant sublease part of the property? The terms of the lease will vary based on the type of commercial agreement that they have, but it is essential to designate who is going to be responsible for paying the utilities in the building. If there is more than one business in the building, will each business owner be responsible for their share?

Signature Section

The final section of any rental agreement will need to be the signature section. Here, the landlord and the tenant will need to print their name, sign their name, and date the document. Notaries are not required in the state of Maryland, but since this is a business agreement, it is recommended for most commercial leases.