New Hampshire Commercial Lease Agreement Template
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A New Hampshire Commercial Lease Agreement represents a contractual commitment between you and your property owner. This covenant entitles you to utilize a space for your enterprise's functions during a predetermined duration and at an established cost. It is customized according to your venture's specific undertakings within the premises. Ensure you fully comprehend each aspect of the agreement before affixing your signature.
What are the related laws for Commercial Lease Agreements in New Hampshire?
Title XLV, Chapter 382-A, Article 2A of the local Uniform Commercial Code is your go-to guide for anything about commercial leases. It covers all the ground rules, from terms you need to understand, to forming and changing an agreement, to what happens when things don’t go as planned.
Let’s take a closer look at some of the key sections:
- Section 382-A:2A-103 is your lease dictionary. It explains all the key terms you'll come across in your lease journey.
- Section 382-A:2A-219 talks about those "what if" situations involving potential loss. It clearly outlines when and under what circumstances the risk of loss from goods passes from one party to another.
- Section 382-A:2A-506 provides a time frame for resolving lease issues. It states that the involved parties can agree to shorten the period for resolving issues to a minimum of one year.
Laws — Chapter 382A, Article 1: New Hampshire Uniform Commercial Code
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Read on to learn more about New Hampshire Commercial Lease Agreement, including:
How to write a Commercial Lease Agreement
As an entrepreneur, deciphering the intricate legal terminology might seem overwhelming. Nevertheless, with a well-defined blueprint and appropriate assistance, you can assuredly compose your lease contract. Let's delve into the core components of a commercial lease agreement and tailor them to your specific requirements – envision this as your amiable, uncomplicated companion in steering through the realm of commercial leases.
1. Permitted Uses
The "Permitted Uses" provision articulates the approved methods for utilizing the leased premises. It explicitly delineates the sanctioned activities, encompassing industrial operations, office tasks, storage, distribution, and production and dissemination of goods.
It is vital to precisely enumerate all the intended operations of your enterprise in this section. This precision averts possible legal complications and guarantees effective distribution of resources. Incorporate every aspect to prevent unanticipated developments. This comprehension helps maintain your business's stability.
Industrial and light manufacturing, warehousing, office, distribution, and assembly, including designing, manufacturing and distributing branded merchandise and promotional products, including all activities incident or ancillary thereto and all other lawful uses and purposes.
2. Term and Option to Extend
(a) This pertains to the lease duration and renewals. It commences on the Start Date and concludes on the Termination Date. Extensions of the lease for two additional two-year terms under identical terms are permissible, albeit with a potential rent escalation. To seek an extension, you must deliver a written notice to the lessor 30 days prior to the expiration of the term.
(b) The "Term" denotes both your initial lease period and any subsequent renewals.
Unambiguous lease terms are imperative for strategic business planning, smooth operations, and potential lease renewals.
(a) The initial term of this Lease will commence on the Effective Date and expire on the Expiration Date. The Tenant may extend the Term of this Lease for [two] additional [two]-year extension term(s), on all the same terms and conditions (except for Rent, which will increase during extension Terms as provided below) contained in this Lease, by notifying the Landlord in writing of the Tenant’s election to do so not less than 30 days before the expiration date of the then-current Term, as the case may be.
(b) The initial term and any applicable extension term are referred to in this Lease as the “Term.”
3. Repairs and Maintenance
The "Maintenance and Repairs" provision outlines who is accountable for maintenance. It encompasses both internal and exterior challenges, such as malfunctioning pipes or impaired stonework. The financial burden is shouldered by your landlord, sparing you from the cost.
Should a maintenance issue not be remedied promptly, you have the right to arrange for the task to be done and deduct the cost from your payment. Always make a record of these situations for potential future references. This provision is essential, as it designates responsibility for maintenance and shields you from unforeseen costs.
From and after the Effective Date, and for the remainder of the Term, the Landlord shall perform ordinary maintenance and repair of the interior of the improvements on the Premises. In addition, the Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to, the exterior walls, building slabs, foundations, structural parts and components, parking lots, gutters, downspouts, roof, roof membrane and coverings and any other part, component or system on the exterior of the Premises. The Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to the sprinkler system, mechanical, HVAC, electrical and plumbing systems of the Premises. If the Landlord fails to perform any repair or replacement required to be made by the Landlord in this Lease, and the Landlord fails to cure such failure within 15 days after receipt of a written demand from the Tenant (or immediately, in the case of emergency repairs, including loss of heating and air conditioning), then the Tenant may make such repair or replacement and the Landlord shall reimburse the Tenant for the cost thereof. If the Landlord fails to pay such amount, then the Tenant may offset against the Rent due hereunder the amount so expended.
4. Alterations
"Modifications" outlines your privileges to alter the leased area. Small adjustments can be made without the landlord's approval, while significant changes will be owned by the lessor. Personal items such as shelving or equipment can be removed as long as it doesn't inflict damage to the property. Comprehending this provision can help avert disagreements and aid in efficiently designing your business layout.
The Tenant may, at its own cost and expense and in a good workmanlike manner, make such alterations, additions, or improvements or erect, remove, or alter such partitions, or erect such racks, shelves, bins, machinery, furniture, fixtures, trade fixtures, equipment, and other personal property as it may deem advisable, without the consent of the Landlord. All fixtures and permanent alterations, additions, improvements, and partitions erected by the Tenant will be and remain the property of the Landlord during the Term, and will be abandoned by the Tenant at the expiration of this Lease. All racks, shelves, bins, machinery, furniture, equipment, and other personal property located in the Premises as of the Effective Date or otherwise installed by the Tenant may be removed by the Tenant at any time if the Tenant so elects. All such removals and restoration shall be accomplished so as not to damage the primary structure or structural qualities of the buildings and other improvements situated on the Premises.
5. Insurance
The "Coverage" provision ensures the protection of both lessee and lessor. As the lessee, it is obligatory for you to have property and liability coverage, identifying the lessor as another insured entity. The lessor's insurance is accountable for damages incurred by the premises.
'Subrogation relinquishment' inhibits insurers from demanding compensation from the other entity after a loss. Your insurance provider should inform the landlord 30 days prior to termination. Acquainting yourself with these terms affords financial safety for your enterprise.
(a) At all times during the Term, the Tenant shall maintain, at its sole cost and expense, policies of insurance containing the following insurance coverages (which policies shall name the Landlord as an additional insured):
(1) Property insurance with premiums paid in advance insuring the Tenant’s property using the standard Special Causes of Loss Form or equivalent for the full replacement value. The foregoing is referred to in this Lease as “Property Insurance.”
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(2) Commercial general liability insurance with respect to the Premises in amounts not less than $1,000,000 per occurrence, $2,000,000 aggregate limit using current ISO forms or equivalent.
(b) The Landlord shall obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having a lien on the Property), and special extended perils ("all risk" as such term is used in the insurance industry). Such insurance must provide for a payment of loss thereunder to the Landlord or to the holder of mortgages or deeds of trust on the Premises.
(c) The policies required by this section must provide for standard waivers of any right of subrogation that the insurer of such party may acquire against the other party to this Lease, for losses that are actually insured against, even if the loss results from a negligent act or omission. The Tenant’s insurance company must provide the Landlord with a certificate of insurance on form ACORD-27 (for Property Insurance required to be carried under this Lease), or its equivalent, and ACORD-25 (for liability insurance required to be carried under this Lease), or its equivalent, which provides that the insurance may not be cancelled without giving the named insured at least 30 days’ prior written notice (or at least ten days’ written notice of cancellation in the event of the non-payment of premium). The Tenant may carry any required insurance under a blanket policy if that policy complies with the requirements of this Lease.
6. Events of Default
The "Defaults" provision enumerates actions viewed as transgressions against the terms of your lease. Usual instances involve being delinquent in rent contributions, experiencing bankruptcy, or erring in adherence to lease stipulations. Familiarize yourself with this section and dodge these missteps to preserve a beneficial rapport with your lessor and ensure your business operation runs without a hitch.
The following events will be deemed to be Events of Default by the Tenant under this Lease:
(1) The Tenant fails to pay any installment of the Rent hereby reserved when due, or any other payment or reimbursement to the Landlord required under this Lease when due, and such failure continues for a period of 30 days after the Tenant’s receipt of written notice of such nonpayment;
(2) The Tenant becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors;
(3) The Tenant files a bankruptcy petition or Tenant is adjudged bankrupt or insolvent in proceedings filed against the Tenant;
(4) A receiver or trustee is appointed for all or substantially all of the assets of the Tenant; and
(5) The Tenant fails to comply with any term, provision, or covenant of this Lease (other than the foregoing in this section 18), and does not cure such failure within 30 days after written notice thereof to the Tenant, or such longer period as may be necessary to cure such default provided the Tenant has promptly commenced curing such default and is diligently proceeding to obtain such cure.
7. Holdover
The "Continuation" provision discusses circumstances when you remain beyond your lease period. If you fail to vacate upon lease expiration, you will be liable for 125% of the standard rent for each additional month. It's crucial to grasp the financial implications of overstaying and devise a timely departure plan.
If the Tenant holds over after the expiration of the Term and does not surrender the Premises prior to the expiration of the Term, then for each such month that the Tenant is holding over, the Tenant shall pay to Landlord 125% of the Rent due under this Lease for each month.
What happens when a Commercial Lease Agreement expires?
Upon the expiration of a commercial lease agreement, several outcomes are possible. I've found a few excellent sources that sketch out the potential sequences:
- Extend or Conclude: It's essential for business tenants to determine whether to extend or finalize their lease agreement well ahead of its completion date. Starting this arrangement 6 to 12 months ahead is typically recommended.
- Shift to Month-to-Month: If there's no renewal of the original lease or no newly signed agreement, the tenant might have an option to shift into a month-to-month occupancy, given that the landlord consents.
- Lessor Occupies: Occasionally, when a commercial lease concludes, the landlord may decide to take over the space, whether for their own residential use or business operations.
- Likelihood of Legal Proceedings: If problems arise around lease expiration—say, for instance, a tenant has habitually lagged in rent payments or hasn't adhered to the lease's terms—the completion of a lease might lead to legal proceedings.
What are the penalties for breaking Commercial Lease Agreements?
Certainly, repercussions for violating a commercial lease agreement differ, but there are some prevalent penalties:
- Outstanding Rent: Frequently, a principal penalty for breaching a commercial lease is holding the tenant accountable for the unpaid rent in accordance with the lease term, even upon vacating the property.
- Notice Duration: The majority of commercial lessors require a notice period of 30, 60, or 90 days when a tenant opts to terminate the lease.
- Fees and Supplementary Expenses: Based on the lease agreement provisions, commercial leases might impose termination charges, and attribute advertising expenses for locating a new occupant and potential cleaning costs to the tenant.
- Legal Ramifications: Subject to the breach's conditions and extent, if dispute resolution methods within the lease are depleted, the matter might intensify into legal proceedings or culminate in a courtroom dispute.
As penalty specifics might fluctuate depending on the lease agreement, it's vital to meticulously scrutinize the lease document to comprehend the precise terms and conditions associated with premature termination.