Warehouse Lease Agreement

This Package Contains:
1. Information & Instructions on Warehouse Lease Agreements; and

2. The Warehouse Lease

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Information & Instructions

Warehouse Lease Agreement

A Warehouse Lease Agreement is an agreement where one party (a “Lessor” also known as the Landlord) agrees to lease/rent warehouse space in a building or as a standalone he owns to another party (a “Lessee” also known as a Tenant) for a specified time.

An oral agreement when renting or leasing a property is a bad practice. While oral promises can be legally binding depending on the terms of the agreement, it can be difficult if not impossible to prove them to a judge. It is always advisable to have a written warehouse lease agreements so that the respective rights and obligations of each party are clearly stated in the agreement. This helps in dealing with key issues and thereby avoiding any misunderstanding and disputes. A written form of agreement is always preferred because that it is the best form of a proof to a tribunal or a judge to address any grievance or take a legal recourse in case of disputes. Hence, both the Lessor and Lessee must sign the Lease. Two original copies should be made (one for the Lessor and one for the Lessee).

Among other issues, the Warehouse Lease Agreement will address the following:

• Duration of lease, an option to renew and how the lease can be terminated.

• The responsibilities of the Lessee to pay the rent, security deposit (if any), taxes, license fees, etc relative to its business, utilities, operating, and repair costs.

• The respective responsibilities of the Lessee and Lessor toward maintaining the premises in good condition and the expenses toward the same.

Information regarding important provisions:

1) Floor space - Define the space in the document to ensure that both parties agree as to the Lease space the Lessee is entitled to. Typically the best way to do this is to reference an exhibit of an architectural drawing that is incorporated into the Agreement.

2) Rental rate - Typically the rental rate is based on a square footage assessment. Rental rates may also be tied to gross sales. The rental rate should be defined with specificity and clarity.

3) Term – The length of the lease has a significant impact on the rental rate. If Lessors choose to offer an option to renew the term of this Lease Agreement, it should be mentioned very clearly when the lease renews itself and the terms thereafter. Option to renew clause is an optional provision and can be deleted.

4) Definition of rent – It is necessary to be very specific in terms of what is actually covered by the rental rate. Are common area expenses, overhead expenses, trash removal, etc. included?

5) Use space - A use clause signifies how the space can and cannot be used. If you are expected to engage in a specific type of assembly or manufacturing activity or the like, you will want to make sure that you have the right to do such things in your floor space.

6) Insurance – This is a typical provision under warehouse leases. The Lessee is responsible for carrying comprehensive general liability insurance, Lessee liability insurance, all risks insurance on merchandise and inventory, and boiler and machinery insurance, if applicable.

7) Lessee Improvements and Alterations: A broader clause is advisable where it clearly states the respective obligations of the Lessee and Lessor, their limitations of cost, and the scope of alterations permitted, etc. This clause should be fair and not too restrictive on the Lessee.

8) Security Deposits/ Late Payments – Security deposits and late payment penalties are optional provisions. Please note that security deposits and late payment penalties are governed by state law. Be sure to research your state’s laws before finalizing these provisions.

DISCLAIMER:

These forms contain the basic terms and language that should be included in a commercial lease agreement. The laws in some states require a Lessor to make additional written disclosures, including disclosures about the condition of the unit, the building, the neighborhood, the environment and any other known problems. Certain cities and municipalities may have additional disclosure requirements that will need to be included. You should consult with a real estate agent or attorney in your area to determine what additional disclosures, if any, are required in your state or locality. Even if these disclosures are not required by law, a Tenant may still request that they be made, and may negotiate to make them part of its agreement.

Laws vary from time to time and from state to state. These forms are not a substitute for legal advice. These forms should be considered only a starting point, and should not be used or signed before first consulting with an attorney to ensure that they address your particular