Commercial Rent Application

[Nicholas Mann]

Just wondering if any owners of mixed use properties or commercial real estate have a sample Application. Some applications for residential tenants don’t seem to apply to commercial. Any thoughts or comments would be helpful.

Thanks 

[Ecaterina Katerina Morosan]

Hi Nicholas, we normally adjust the terms of a standard lease based on property type and landlord's requirements. Also, for larger properties, we create an addendum aka House Rules to make sure all tenants occupying the units comply to the same rules. We include common areas, backyard, front area, noise regulations, roof access regulations. late payments, fines for pet waste, garbage disposal etc. If there any terms in regular residential lease don't apply to your property you can legally cross that word or paragraph and add tenants and landlords initials when signing the lease. 

[Chris Calabrese]

Nicholas, I've never used a standard application for commercial tenants mainly because these properties are all so unique. You may be dealing with a credit rated national tenant one day and a local mom and pop business the next. For all businesses, you want to make sure they have the business to support the rent. You can ask for financial records and references from vendors, banks, etc. who do business with them. For many smaller businesses, you should require a personal guarantee from the owners, in which case you could use a residential-style application to get permission to pull credit, background, etc.

[Mohammed Rahman]

hey @Nicholas Mann - there's no sample application or standard format for commercial lease applications. 

*sometimes* the broker you're working with may have a template that they use to submit lease LOI's to landlords to start the conversation

[Nicholas Mann]

Thank you @Chris Calabrese. It will most likely be a small business owner so I am leaning toward a residential type application with background/credit check.

[Henry Clark]

Make sure you add sections around any physical change to the building.

1.  You might go half in on a change or addition (hvac system, office room, etc).

2.  Also add when they leave they have to leave the addition at no cost to you.  Don't want them tearing out a restaurant vent fan system and leaving a hole for you.

3.  Define penalties and an exit plan that does not require you going to court.

4.  Have them put you down as an additional insured.  If they don't do that annually, put a clause in you can increase their rent by $x,xxx to cover you pulling the insurance.  Make sure their coverage for Property/Liab, also covers any Personal property coverage that impacts you.  Example:  Your rent a Restaurant location with existing tables, chairs, restaurant equipment, cash register, refrigerators, freezers, etc.  They have a fire and no Personal Property coverage.  You're out $200,000 to buy new equipment.

5.  Property tax payments.  Same thing as 4 above.  Basically, you want outs or procedures to where you don't have to go to court to move forward.

6.  You want to always maintain control over your locations Google Pin location.

Be more specific on the type of Real estate and types of businesses that might go there.  You will get more detailed suggestions.

[Ronald Rohde]

I never see an application, it should just be a list of documents to provide