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What is a Commercial Real Estate Lease With Option To Purchase?

A Commercial Real Estate Lease with Option to Purchase provides flexibility for both landlords and tenants in making decisions about a property. Similar to a standard lease, a Commercial Real Estate Lease with Option to Purchase means that the tenant may be able to purchase the property under certain conditions. Making this essential document can help both parties to avoid disagreements in the future. You can tap or click on the "Make document" button to take a closer look at the sample Commercial Real Estate Lease With Option To Purchase and preview the questions that you will need to answer to customize your document.

When to use a Commercial Real Estate Lease with Option to Purchase:

  • You're a landlord with commercial property to lease, and want to give the tenant the option of purchasing.
  • You'd like to purchase the commercial property you're renting.
  • You own a property management company.

Sample Commercial Real Estate Lease with Option to Purchase

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Commercial Real Estate Lease With Option To Purchase

 

 

This Lease Agreement (this "Lease") is dated as of , by and between ("Landlord"), and the following tenants:

 

 

(the "Tenant")

 

Subject to the terms and conditions stated below the parties agree as follows:

 

 

PREMISES. Landlord, in consideration of the lease payments provided in this Lease, leases to Tenant (the "Premises") located at , , .

LEGAL DESCRIPTION. The legal description for the premises is: LEGAL DESCRIPTION. The legal description for the premises is attached as Exhibit A. LEGAL DESCRIPTION. A sketch of the Premises subject to this Lease is attached as an exhibit. Tenant has inspected the Property and by the execution of this Lease accepts it in its present condition.

 

TERM. The lease term will begin on and will terminate on .

 

DEPOSIT AMOUNT. At the time of the signing of this Lease, Tenant shall pay to Landlord, in trust, a deposit of .

 

The deposit shall be applied as follows:

 

Security Deposit: to be held and disbursed for Tenant damages to the Premises or other defaults under this Agreement (if any) as provided by law.

 

Nonrefundable Option Consideration:

 

 

LEASE PAYMENTS. Tenant shall pay to Landlord Lease payments shall be made to the Landlord at , , , which address may be changed from time to time by the Landlord.

 

POSSESSION. Tenant shall be entitled to possession on the first day of the term of this Lease, and shall yield possession to Landlord on the last day of the term of this Lease, unless otherwise agreed by both parties in writing. At the expiration of the term, Tenant shall remove its goods and effects and peaceably yield up the Premises to Landlord in as good a condition as when delivered to Tenant, ordinary wear and tear excepted.

The following furnishings will be provided: PARKING. Tenant shall be entitled to use parking space(s) for the parking of the Tenant's customers'/guests' motor vehicle(s).

 

PROPERTY INSURANCE. Landlord shall be named as an additional insured in such policies. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies reasonably satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies. Tenant shall also maintain any other insurance which Landlord may reasonably require for the protection of Landlord's interest in the Premises. Tenant is responsible for maintaining casualty insurance on its own property.

in a total aggregate sum of at least . With personal injury limits of at least for injury to one person, and for any one accident, and a limit of at least for damage to property.

MAINTENANCE. Landlord shall have the responsibility to maintain the Premises in good repair at all times.

MAINTENANCE. Tenant shall have the responsibility to maintain the Premises in good repair at all times during the term of this Lease.

MAINTENANCE.

 

During the Lease period, Landlord's obligations for maintenance shall include:

- the roof, outside walls, and other structural parts of the building

- the parking lot, driveways, and sidewalks, including snow and ice removal

- the sewer, water pipes, and other matters related to plumbing

- the electrical wiring

- the air conditioning system

-

- all other items of maintenance not specifically delegated to Tenant under this Lease.

 

Tenant's obligations for maintenance shall include:

- the roof, outside walls, and other structural parts of the building

- the parking lot, driveways, and sidewalks, including snow and ice removal

- the sewer, water pipes, and other matters related to plumbing

- the electrical wiring

- the air conditioning system

-

- all other items of maintenance not specifically delegated to Landlord under this Lease.

UTILITIES AND SERVICES. Landlord shall be responsible for all utilities and services incurred in connection with the Premises.

UTILITIES AND SERVICES. Tenant shall be responsible for all utilities and services incurred in connection with the Premises.

UTILITIES AND SERVICES.

 

During the Lease period, Landlord shall be responsible for the following utilities and services in connection with the Premises:

- electricity

- water and sewer

- gas

- heating

- garbage and trash disposal

- janitorial services

- telephone services

-

 

Tenant shall be responsible for the following utilities and services in connection with the Premises:

- electricity

- water and sewer

- gas

- heating

- garbage and trash disposal

- janitorial services

- telephone service

-

 

Tenant acknowledges that Landlord has fully explained to Tenant the utility rates, charges and services for which Tenant will be required to pay to Landlord (if any), other than those to be paid directly to the third-party provider.

Landlord shall pay all real estate taxes and assessments for the Premises.Tenant shall pay all real estate taxes and assessments which are assessed against the Premises during the time of this Lease.Landlord Tenant

 

LANDLORD'S INABILITY TO SUPPLY OR DELAY IN SUPPLYING SERVICE OR REPAIR TO TENANT. The obligation of Tenant to pay rent hereunder and to perform all other covenants shall not be excused because Landlord is unable to supply, or is delayed in supplying, any service or repair to be supplied by Landlord under the terms of this Lease, when such inability or delay shall be due to accident, or to the extensiveness of the alterations or repairs desirable or necessary to be made, or to Landlord's inability or difficulty in securing supplies or labor for the provision of such service, or to some other cause, rather than gross negligence on the part of Landlord. No diminution or abatement of rent, or other compensation, shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building.

 

EMINENT DOMAIN. If the whole or any part of the leased premises shall be taken by eminent domain, the term of this Lease shall terminate from the date title vests in the governmental authority. Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. No part of any award shall belong to Tenant

 

DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound. Subject to any governing provisions of law to the contrary, if Tenant fails to cure any financial obligation within days (or any other obligation within days) after written notice of such default is provided by Landlord to Tenant, Landlord may take possession of the Premises without further notice (to the extent permitted by law), and without prejudicing Landlord's rights to damages. In the alternative, Landlord may elect to cure any default and the cost of such action shall be added to Tenant's financial obligations under this Lease. Tenant shall pay all costs, damages, and expenses (including reasonable attorney fees and expenses) suffered by Landlord by reason of Tenant's defaults. All sums of money or charges required to be paid by Tenant under this Lease shall be additional rent, whether or not such sums or charges are designated as "additional rent". The rights provided by this paragraph are cumulative in nature and are in addition to any other rights afforded by law.

LATE PAYMENTS. For any payment that is not paid within days after its due date, Tenant shall pay a late fee of .LATE PAYMENTS. For each payment that is not paid within days after its due date, Tenant shall pay a late fee of per day, beginning with the day after the due date.LATE PAYMENTS. For each payment that is not paid within days after its due date, Tenant shall pay a late fee equal to % of the required payment.

 

CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative, and shall not be construed as exclusive unless otherwise required by law.

 

RELATIONSHIP OF PARTIES. Landlord and Tenant shall not be considered or deemed to be joint venturers or partners and neither shall have the power to bind or obligate the other except as set forth herein.

 

OPTION TO PURCHASE. Tenant, upon satisfactory performance of this lease, shall have the option to purchase the real property described herein for a purchase price of , provided that the Tenant timely executes the option to purchase and is not in default of the Lease Agreement. Thereafter, each of the parties shall promptly execute any and all further instructions or other documents including a Sale Agreement which may be reasonably required. for purchase of the real property.

 

NOTICE REQUIRED TO EXERCISE OPTION. To exercise the Option to Purchase, the Tenant must deliver to the Landlord, a written notice of Tenant's intent to purchase. In addition, the written notice must specify a valid closing date. The closing date must occur before the original expiration date of the Lease Agreement.

 

OPTION CONSIDERATION. Nonrefundable option consideration paid by the Tenant as consideration for this Option to Purchase Agreement, shall be credited towards the purchase price at closing if the Tenant timely exercises the option to purchase.

 

EXCLUSIVITY OF OPTION. This Option to Purchase Agreement is exclusive and non-assignable and exists solely for the benefit of the named parties above. Should Tenant attempt to assign, convey, delegate, or transfer this option to purchase without the Landlord's express written permission, any such attempt shall be deemed null and void.

 

CLOSING AND SETTLEMENT. Tenant agrees that closing costs in their entirety, including any points, fees, and other charges required by the third-party lender, shall be the sole responsibility of Tenant. The only expense related to closing costs apportioned to Landlord shall be the pro-rated share of the ad valorem taxes due at the time of closing, for which Landlord is solely responsible.

 

FINANCING DISCLAIMER. THE PARTIES ACKNOWLEDGE THAT IT IS IMPOSSIBLE TO PREDICT THE AVAILABILITY OF OBTAINING FINANCING TOWARDS THE PURCHASE OF THIS PROPERTY. OBTAINING FINANCING SHALL NOT BE HELD AS A CONDITION OF PERFORMANCE OF THIS OPTION TO PURCHASE AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS OPTION TO PURCHASE AGREEMENT IS NOT ENTERED INTO IN RELIANCE UPON ANY REPRESENTATION OR WARRANTY MADE BY EITHER PARTY.

 

REMEDIES UPON DEFAULT. If Tenant defaults under this Option to Purchase Agreement or the Lease Agreement, then in addition to any other remedies available to Landlord at law or in equity, Landlord may terminate this Option to Purchase by giving written notice of the termination. If terminated, the Tenant shall lose entitlement to any refund of rent or option consideration. For this Option to Purchase Agreement to be enforceable and effective, the Tenant must comply with all terms and conditions of the Lease Agreement.

 

RECORDING OF AGREEMENT. Tenant shall not record this Option to Purchase Agreement on the Public Records of any public office without the express and written consent of Landlord.

 

ACKNOWLEDGMENTS. The parties are executing this Option to Purchase Agreement voluntarily and without any duress or undue influence. The parties have carefully read this Option to Purchase Agreement and have asked any questions needed to understand its terms, consequences, and binding effect and fully understand them and have been given an executed copy.

 

GOVERNING LAW. This Lease shall be construed in accordance with the laws of the State of .

 

ENTIRE AGREEMENT/AMENDMENT. This Lease Agreement contains the entire agreement of the parties and there are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Lease. This Lease may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.

 

SEVERABILITY. If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision, it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

 

WAIVER. The failure of either party to enforce any provisions of this Lease shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease.

 

BINDING EFFECT. The provisions of this Lease shall be binding upon and inure to the benefit of both parties and their respective legal representatives, successors and assigns.

 

SIGNATURES AND NOTICE. This Lease shall be signed by the following parties. No notice under this Lease shall be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed to the parties below:

 

LANDLORD:

 

,

 

TENANT:

 

 

Such addresses may be changed from time to time by either party by providing notice as set forth above. Notices mailed in accordance with the above provisions shall be deemed received on the third day after posting.

 

LANDLORD:

 

 

 

By: Date:

 

 

 

TENANT:

 

 

 

By: Date:

 

 

State laws vary on the amount that may be charged as a late payment fee. Consult an attorney to determine whether limits apply in your state.

 

Consult an attorney to determine whether the laws of your state limit the amount that may be charged for checks returned due to non-sufficient funds.

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Commercial Real Estate Lease with Option to Purchase FAQs

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  • Is this Commercial Lease Option Contract legally binding under state law?

    As with any legal contract, Commercial Real Estate Leases will not be legally binding until all parties have signed. Different from a Commercial Real Estate Lease With Option To Purchase template or blank PDF file that you may discover elsewhere, your rental contract comes with the option of Document Defense®, so an attorney in our network can assess the situation and take action if you don't receive payment or face any other issue.

  • Do landlords have to create Commercial Lease Option Contracts?

    Even if you are offering the property to an acquaintance, it is always a good idea to use a Commercial Real Estate Lease With Option To Purchase. You might opt to use a Commercial Real Estate Lease With Option To Purchase because, when made properly, it presents the following list of benefits:

    • Roles and responsibilities are understood by all
    • The duration of the tenancy is agreed upon
    • Rent payment requirements are clearly defined

    If you don't have this document, you and your tenant may experience any of the following repercussions: unpredictable property damage, challenges collecting rent payments, and, not to mention, almost no ability to demand a remedy if something were to go wrong.

  • How should the main contents of a Commercial Real Estate Lease With Option To Purchase template be organized?

    The details needed for making your Commercial Real Estate Lease With Option To Purchase are:

    • The address and description of your property
    • The legal name of each inhabitant
    • What rent and other fees will be charged and when they are due
    • What utilities and/or amenities will be included
    • What the start and end dates are for the lease

    Your document will also include language related to invited visitors, late payments, animals, smoking, and moving out before the rental period ends. While making your document, you also will be able to add information related to maintenance procedures, insurance requirements, and furnishings. Using the document tool, you have the power to add more customization, if necessary.

  • On average, what would I traditionally need to pay for a Commercial Real Estate Lease With Option To Purchase?

    Luckily, you do not have to pay hundreds of dollars in legal fees to get your contract in writing. When using Rocket Lawyer, you are able to produce a Commercial Real Estate Lease With Option To Purchase for free online today. Your agreement is assembled piece by piece, so you can be certain that it contains all of the appropriate details that you'll need. Simply click the button labeled "Make document" to begin.

  • Are there any next steps to take after I draft a Commercial Real Estate Lease With Option To Purchase?

    To make your Commercial Real Estate Lease With Option To Purchase legally binding, you must sign it. RocketSign® makes the online signature process easy. With a membership, you also will be able to copy, print out, and/or download it as necessary. After signing, make sure that your tenant receives copies of the fully executed agreement. Also, feel free to take a look at more real estate legal documents in our library.

  • How will local rental laws affect my Commercial Real Estate Lease?

    Rental laws often change over time and they may differ by city. If you have any questions related to local property rental laws, you can talk to an attorney today. Getting someone to double-check your document could take longer than you'd think if you do it alone. An alternate approach would be via the Rocket Lawyer On Call® attorney network. Rocket Lawyer members can request guidance from an experienced attorney or get answers to other questions. As a property owner or manager, you can Work Confidently® knowing that Rocket Lawyer is by your side.

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