Lease Tenant Specifies Business Provisions Rent Option Common

Most "commercial leases" (rental agreements for businesses) contain many "provisions" (clauses; agreements about what will happen under specific circumstances) that the landlord and tenant must agree upon. For example, provisions might "stipulate" (state explicitly or very clearly) the amount and frequency of rent payments, the "duration" (length of time) of the lease, and the "premises" (the exact location covered by the lease). An "escalation" clause specifies when and by how much rent can be increased in the future. A "maintenance" clause specifies which types of "maintenance" (repairs; taking care of the building) are the responsibility of the landlord, and which are the responsibility of the tenant.

Many leases contain provisions for "exclusivity," meaning that only the tenant may operate the business on the premise, and that the tenant may not "sub-lease" (accept money from another person to operate the business) to another business. Leases can also contain clauses about competition, specifying that the landlord will not rent "adjacent" (immediately next to) or nearby properties to similar businesses.

In a "troubled economy" (a place and period of time with slow economic growth and many businesses closing), it is common to see "landlord solvency" clauses, which stipulate what will happen if the landlord's "mortgage company" (the company that provides a loan to buy the property) "forecloses on the property" (takes the property away from the owner, because he or she has not made payments on the loan).

Finally, commercial leases might include a "renewal option" and/or a "purchase option." A "renewal option" specifies whether and how the tenant will be allowed to "renew" (start again) the lease at the end of the "lease term" (the period of time that the lease covers). A "purchase option" specifies whether the tenant will have the "option" (choice) of buying the property when the lease "expires" (ends).