Arizona Commercial Real Estate Lease

Please note, anything on this site does NOT represent legal advice. You should consult a licensed attorney before signing any documents (or sending them out to clients).

What sections are important for an Arizona Commercial Lease?

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Note: This is written from the Landlords perspective

Here is a quick list of the main components of a commercial lease for Arizona:

• The Date the agreement goes into force

• The two parties, who is the Landlord and who is the Tenant, and where they are located

• A bunch of legalese, since it’s a contract, there must be consideration (aka what is being exchanged for this)

• Definitions - we need to make sure each of us are on the same page in regards to rent, common areas, etc.

• The address - what the tenant is actually leasing

• The time the property is available to the tenant (you can restrict hours, access locations)

• What the property can be used for - just legalese

• The Rent, when it’s due, how much, and what it’s considered late. What the month to month cost is once the lease is over (Overholding)

• If the rent is late, that the Landlord may enter the property, change the locks and sell the Tenants stuff (Distress). This is the largest difference from a residential lease, the Commercial Landlord has much wider latitude

• The Landlord can even forcibly evict Tenants if they are not paying and won’t budge. They can also dispose of Tenants stuff if it’s not deemed worth it (yup that’s in there). The Landlord can then charge Tenants for all of their actions, and the entire amount of the lease

• TI or Tenant Improvements discusses what the Tenants are allowed to change on the property, and what they must get permission for. Typically any alterations the Landlord must bless

• Abandonment - If the tenant decides to leave, the Landlord can take the property back and call all the rent’s due

• If the Tenant can sub-lease the property or not, typically this is not wanted since you have not vetted the people they are sub-leasing to. Tenants will have to negotiate this if they want to sub-lease

• The Tenant is not allowed to have a “going out of business” or bulk sale as they call it. Landlord needs to approve these, if the business is going away, then something is really wrong

• Who is responsible for what kind of maintenance on the property. This can get expensive, so each side needs to weigh this carefully. Triple-NET or NNN leases typically have the Tenant cover all maintenance on the building. This might sound great from a Landlord perspective, but the rents are typically lower

• If there is damage, that the Tenants must notify the Landlord

• Standards - Tenants need to make sure the property is safe and their business abides by all laws and regulations

• Hazardous materials - what can Tenants keep these on premises? Depends on the type of building! Licensing is important here if the Landlord is going to allow certain things

To wrap it up is the signature fields, with a witness for each part. This should be signed in the proper corporate format, which can become an issue down the road if the Tenant is unable to pay rent, the business is liable if signed properly, and typically not the person. Consult an attorney for the correct signature components!