The Woodlands

What Should you Include in a Commercial Lease Agreement?

March 4, 2023

When you own commercial real estate property in Texas, you may consider leasing it to other businesses. This decision can hold many benefits for you including the enjoyment of passive income.

Prior to allowing someone else to use your space, you will want to implement a formal lease agreement. Knowing what to include in this legal document can help protect you and your assets from harm.

Personal expectations

You will undoubtedly have expectations for the use of your space. Because you own the property outright, you have the legal right to determine rules and expectations. Some provisions you may consider include the following:

  • Whether or not you will allow subleasing
  • Costs for rent, utilities, and other fees
  • Reservations for property use
  • Protocols for maintenance, upkeep, and repairs
  • Tenant flexibility for personalization of the space

Your lease agreement is a prime opportunity to clearly outline tenant responsibilities. You can also address your plan for handling disciplinary measures in circumstances of non-compliant behavior.


Although enjoying the tax benefits of a sole proprietorship or partnership, an LLC has the liability protection of a corporation. In the event of bankruptcy or a lawsuit, structuring as an LLC protects the personal assets of the LLC members. Therefore, members do not risk property, such as banking accounts or homes, to pay off the debts of the LLC.

Legal requirements

By law, your tenants must observe legal obligations to prevent costly consequences for everyone involved. According to Business News Daily, some topics you may wish to discuss include environmental expectations, zoning laws and nuisance laws. It is important that you outline those expectations in your lease agreement and a Texas attorney knowledgeable about property law can be a valuable asset.

One of the best ways to determine that you have a structurally sound lease agreement is to involve an attorney. The attorneys at Quadros Migl & Crosby will provide guidance so you can present a clear and direct agreement to potential tenants. With a well-written lease agreement on your side, you can have peace of mind knowing your assets have adequate protection.