Sample Commercial Lease Agreement Part 1

COMMERCIAL LEASE AGREEMENT IN CONSIDERATION OF the Landlord leasing certain premises to the Tenant, the Tenant leasing those premises from the Landlord and the mutual benefits and obligations set forth in this Lease, the receipt and sufficiency of which consideration is hereby acknowledged, the Parties to this Lease (the "Parties") agree as follows: Basic Terms 1. The following basic terms are hereby approved by the Parties and each reference in this Lease to any of the basic terms will be construed to include the provisions set forth below as well as all of the additional terms and conditions of the applicable sections of this Lease where such basic terms are more fully set forth: a. Landlord: Shyster Corporation b. Address of Shyster Corporation: 123 4th St. (604) 524-6000 (604) 123-4567 c. Tenant: Poor Sucker Limited d. Address of Poor Sucker Limited: _________________________________ e. Operating Name of Poor Sucker Limited: Joe's Jeans and Skirts f. Leasable Area of Premises: 1500 square feet g. Commencement Date of Lease: February 1, 2018 h. Base Rent: Annual $50.00 per square foot (approximately $75,000.00 per annum), payable in equal monthly instalments i. Permitted Use of Premises: Retail sale of clothing and no other purpose. j. Advance rent: First and Last month's rent k. Security/Damage Deposit: $9,000.00 Definitions 2. When used in this Lease, the following expressions will have the meanings indicated: a. "Additional Rent" means all amounts payable by the Tenant under this Lease except Base Rent, whether or not specifically designated as Additional Rent elsewhere in this Lease; b. "Building" means the Lands together with all buildings, improvements, equipment, fixtures, property and facilities from time to time thereon, as from time to time altered, expanded or reduced by the Landlord in its sole discretion; c. "Common Areas and Facilities" mean: i. those portions of the Building areas, buildings, improvements, facilities, utilities, equipment and installations in or forming part of the Building which from time to time are not designated or intended by the Landlord to be leased to tenants of the Building including, without limitation, exterior weather walls, roofs, entrances and exits, parking areas, driveways, loading docks and area, storage, mechanical and electrical rooms, areas above and below leasable premises and not included within leasable premises, security and alarm equipment, grassed and landscaped areas, retaining walls and maintenance, cleaning and operating equipment serving the Building; and ii. those lands, areas, buildings, improvements, facilities, utilities, equipment and installations which serve or are for the useful benefit of the Building, the tenants of the Building or the Landlord and those having business with them, whether or not located within, adjacent to or near the Building and which are designated from time to time by the Landlord as part of the Common Areas and Facilities; d. "Lands" means the land legally described as: i. Block 1 Plan 1 City of Vancouver, BC; e. "Leasable Area" means with respect to any rentable premises, the area expressed in square feet of all floor space including floor space of mezzanines, if any, determined, calculated and certified by the Landlord and measured from the exterior face of all exterior walls, doors and windows, including walls, doors and windows separating the rentable premises from enclosed Common Areas and Facilities, if any, and from the centre line of all interior walls separating the rentable premises from adjoining rentable premises. There will be no deduction or exclusion for any space occupied by or used for columns, ducts or other structural elements; f. "Premises" means the retail store at 123 4th Ave. Vancouver, BC V4L1Ta and comprises a Leasable Area of 1500 square feet; g. "Proportionate Share" means a fraction, the numerator of which is the Leasable Area of the Premises and the denominator of which is the aggregate of the Leasable Area of all rentable premises in the Building. h. "Rent" means the total of Base Rent and Additional Rent. Intent of Lease 3. It is the intent of this Lease and agreed to by the Parties to this Lease that this Lease will be absolutely carefree triple net to the Landlord such that, all and every cost, expense, rate, tax or charge in any way related to the Premises, to the operation of the Building and to the Tenant's share of Operating Costs will be borne by the Tenant for its own account and without any variation, setoff or deduction whatsoever, save as specifically provided in this Lease to the contrary. Leased Premises 4. The Landlord agrees to rent to the Tenant the Premises for only the permitted use (the "Permitted Use") of: Retail sale of clothing and no other purpose. 5. While the Tenant, or an assignee or subtenant approved by the Landlord, is using and occupying the Premises for the Permitted Use and is not in default under the Lease, the Landlord agrees not to Lease space in the Building to any tenant who will be conducting in such premises as its principal business, the services of: Retail sale of clothing and no other purpose. 6. Subject to the provisions of this Lease, the Tenant is entitled to the exclusive use of the following 1 parking space on or about the Premises: the tenant shall have the exclusive use of parking stall 323 in the parkade. (the "Parking"). Only properly insured motor vehicles may be parked in the Tenant's space. 7. The Landlord reserves the right in its reasonable discretion to alter, reconstruct, expand, withdraw from or add to the Building from time to time. In the exercise of those rights, the Landlord undertakes to use reasonable efforts to minimize any interference with the visibility of the Premises and to use reasonable efforts to ensure that direct entrance to and exit from the Premises is maintained. 8. The Landlord reserves the right for itself and for all persons authorized by it, to erect, use and maintain wiring, mains, pipes and conduits and other means of distributing services in and through the Premises, and at all reasonable times to enter upon the Premises for the purpose of installation, maintenance or repair, and such entry will not be an interference with the Tenant's possession under this Lease. 9. The Landlord reserves the right, when necessary by reason of accident or in order to make repairs, alterations or improvements relating to the Premises or to other portions of the Building to cause temporary obstruction to the Common Areas and Facilities as reasonably necessary and to interrupt or suspend the supply of electricity, water and other services to the Premises until the repairs, alterations or improvements have been completed. There will be no abatement in rent because of such obstruction, interruption or suspension provided that the repairs, alterations or improvements are made as expeditiously as is reasonably possible. 10. Subject to this Lease, the Tenant and its employees, customers and invitees will have the nonexclusive right to use for their proper and intended purposes, during business hours in common with all others entitled thereto those parts of the Common Areas and Facilities from time to time permitted by the Landlord. The Common Areas and Facilities and the Building will at all times be subject to the exclusive control and management of the Landlord. The Landlord will operate and maintain the Common Areas and Facilities and the Building in such manner as the Landlord determines from time to time. Term 11. The term of the Lease commences at 12:00 noon on February 1, 2018 and ends at 12:00 noon on January 31, 2025 (the "Term"). 12. Notwithstanding that the Term commences on February 1, 2018, the Tenant is entitled to possession of the Premises at 12:00 noon on January 15, 2018. 13. Should the Tenant remain in possession of the Premises with the consent of the Landlord after the natural expiration of this Lease, a new tenancy from month to month will be created between the Landlord and the Tenant which will be subject to all the terms and conditions of this Lease but will be terminable upon either party giving one month's notice to the other party. Rent 14. Subject to the provisions of this Lease, the Tenant will pay a base rent of $50.00 per square foot (approximately $75,000.00), payable per month, for the Premises (the "Base Rent"), without setoff, abatement or deduction. In addition to the Base Rent, the Tenant will pay for any fees or taxes arising from the Tenant's business. 15. For the first 1 month of the term (the "Abatement Period"), the Tenant will not be obligated to pay the monthly instalment of Base Rent due but will be liable to pay all other amounts payable under this Lease. The entire Base Rent otherwise due and payable for the Abatement Period will become immediately due and payable upon the occurrence of an event of default under this Lease. 16. The Tenant will pay the Base Rent on or before the 1st of each and every month of the Term to the Landlord. 17. The Base Rent for the Premises will increase over the Term of the Lease as follows: 3rd year - $60 per square foot. 4th year $70 per square foot 5th year $80 per square foot. 18. The Tenant will be charged an additional amount of $100.00 per day for any Rent that is received after the due date. 19. In the event that this Lease commences, expires or terminates before the end of a period for which any Additional Rent or Base rent would be payable, or other than at the start or end of a calendar month, such amounts payable by the Tenant will be apportioned pro rata on the basis of a thirty (30) day month to calculate the amount payable for such irregular period. 20. No acceptance by the Landlord of any amount less than the full amount owed will be taken to operate as a waiver by the Landlord for the full amount or in any way to defeat or affect the rights and remedies of the Landlord to pursue the full amount. Operating Costs 21. In addition to the Base Rent, the Tenant will pay as Additional Rent, without setoff, abatement or deduction, its Proportionate Share of all of the Landlord's costs, charges and expenses of operating, maintaining, repairing, replacing and insuring the Building including the Common Areas and Facilities from time to time and the carrying out of all obligations of the Landlord under this Lease and similar leases with respect to the Building ("Operating Costs") which include without limitation or duplication, all expenses, costs and outlays relating to the following: a. cleaning and janitorial services; b. operating and servicing elevators; c. all utilities supplied to the Common Areas and Facilities; d. security; e. window cleaning; f. all insurance relating to the Building as placed by the Landlord from time to time, acting prudently; g. repairs and replacements to the Building and any component of the Building; h. accounting and auditing; i. provision, repair, replacement and maintenance of heating, cooling, ventilation and air conditioning equipment throughout the Building; j. all amounts paid to employees or third parties relating to work performed in relation to the Building including in the case of employees all usual benefits, including a management fee not to exceed 5% of gross receipts from the Building; k. supplies used in relation to operating and maintaining the Building; l. provision of a building superintendent and associated personnel employed for the Building including a reasonable rental value for office space used by those persons and related expenses including uniforms; m. all outdoor maintenance including landscaping and snow removal; n. operation and maintenance of parking areas; and o. preventive maintenance and inspection. 22. Except as otherwise provided in this Lease, Operating Costs will not include debt service, depreciation, costs determined by the Landlord from time to time to be fairly allocable to the correction of construction faults or initial maladjustments in operating equipment, all management costs not allocable to the actual maintenance, repair or operation of the Building (such as in connection with leasing and rental advertising), work performed in connection with the initial construction of the Building and the Premises and improvements and modernization to the Building subsequent to the date of original construction which are not in the nature of a repair or replacement of an existing component, system or part of the Building. 23. Operating Costs will also not include the following: a. any increase in insurance premiums to the centre as a result of business activities of other Tenants; b. the costs of any capital replacements; c. the costs incurred or accrued due to the willful act or negligence of the Landlord or anyone acting on behalf of the Landlord; d. structural repairs; e. costs for which the Landlord is reimbursed by insurers or covered by warranties; f. costs incurred for repairs or maintenance for the direct account of a specific Tenant or vacant space; g. costs recovered directly from any Tenant for separate charges such as heating, ventilating, and air conditioning relating to that Tenant's leased premises, and in respect of any act, omission, neglect or default of any Tenant of its obligations under its Lease; or h. any expenses incurred as a result of the Landlord generating revenues from common area facilities will be paid from those revenues generated. 24. In computing Operating Costs there will be credited as a deduction the amounts of proceeds of insurance relating to insured damage. Any expenses not directly incurred by the Landlord but which are included in Operating Costs may be estimated by the Landlord, acting reasonably if and to the extent the Landlord cannot ascertain the actual amount of such expenses from the tenants who incurred them. Any report of the Landlord's independent chartered accountant for such purpose will be conclusive as to the amount of Operating Costs for any period to which such report relates. To the extent that any component of Operating Costs should be allocated, in the reasonable opinion of the Landlord, to any group of tenants, the Landlord may, but will not be obliged to allocate the cost of that Component to Operating Costs of those tenants alone. 25. The Tenant will pay: a. To the Landlord, the Tenant's Proportionate Share of all real property taxes, rates, duties, levies and assessments which are levied, rated, charged, imposed or assessed by any lawful taxing authority (whether federal, provincial, municipal, school or otherwise) against the Building and the land or any part of the Building and land from time to time or any taxes payable by the Landlord which are charged in lieu of such taxes or in addition to such taxes, but excluding income tax upon the income of the Landlord to the extent that such taxes are not levied in lieu of real property taxes against the Building or upon the Landlord in respect of the Building. b. To the lawful taxing authorities, or to the Landlord, as it may direct, as and when the same become due and payable, all taxes, rates, use fees, duties, assessments and other charges that are levied, rated, charged or assessed against or in respect of all improvements, equipment and facilities of the Tenant on or in default by the Tenant and in respect of any business carried on in the Premises or in respect of the use or occupancy of the Premises by the Tenant and every subtenant, licensee, concessionaire or other person doing business on or from the Premises or occupying any portion of the Premises. 26. The Tenant will deliver promptly to the Landlord a copy of any separate tax bills or separate assessment notices for the Premises and receipts evidencing the payment of all amounts payable by the Tenant directly to any taxing authority and will furnish such information in connection therewith as the Landlord may from time to time require. 27. The Tenant will pay to the Landlord, forthwith upon demand, the following amounts: a. If the Tenant or any person occupying the Premises or any part of the Premises will elect to have the Premises or any part of the Premises assessed for separate school taxes, any additional amount payable in respect of the Premises or the Building as a result of such election, as reasonably determined by the Landlord. b. An amount equal to any increase in the Operating Costs if such increase is directly or indirectly attributable to any installation in or upon the Premises or any activity or conduct on the Premises. c. In such manner as the Landlord will from time to time direct, the cost of supplying all water, fuel, electricity, telephone and any other utilities used or consumed upon or serving the Premises. If the Tenant is billed for the consumption or use of such utilities directly by the appropriate utility authority, the Tenant will pay any such billings promptly when due and payable. If separate check meters are not installed in respect of utilities consumption in, upon or serving the Premises or if the Tenant is not billed for the consumption of such utilities directly by the competent authority, the Landlord will allocate to the Tenant, on a reasonable basis, a share of the total costs of all utilities consumed within the Building. 28. All amounts payable by the Tenant relating to the Operating Costs will be deemed to be rent and receivable and collectable as such notwithstanding the expiration or sooner termination of this Lease and all remedies of the Landlord for nonpayment of rent will be applicable thereto. 29. For any rent review negotiation, the Base Rent will be calculated as being the higher of the Base Rent payable immediately before the date of review and the Open Market Rent on the date of review. Landlord's Estimate 30. The Landlord may, in respect of all taxes and Operating Costs and any other items of Additional Rent referred to in this Lease compute bona fide estimates of the amounts which are anticipated to accrue in the next following lease year, calendar year or fiscal year, or portion of such year, as the Landlord may determine is most appropriate for each and of all items of Additional Rent, and the Landlord may provide the Tenant with written notice and a reasonable breakdown of the amount of any such estimate, and the Tenant, following receipt of such written notice of the estimated amount and breakdown will pay to the Landlord such amount, in equal consecutive monthly instalment throughout the applicable period with the monthly instalment of Base Rent. With respect to any item of Additional rent which the Landlord has not elected to estimate from time to time, the Tenant will pay to the Landlord the amount of such item of Additional Rent, determined under the applicable provisions of this Lease, immediately upon receipt of an invoice setting out such items of Additional Rent. Within one hundred and twenty (120) days of the conclusion of each year of the term or a portion of a year, as the case may be, calendar year or fiscal year, or portion of such year, as the case may be, for which the Landlord has estimated any item of Additional Rent, the Landlord will compute the actual amount of such item of Additional Rent, and make available to the Tenant for examination a statement providing the amount of such item of Additional Rent and the calculation of the Tenant's share of that Additional Rent for such year or portion of such year. If the actual amount of such items of Additional Rent, as set out in the any such statement, exceeds the aggregate amount of the instalment paid by the Tenant in respect of such item, the Tenant will pay to the Landlord the amount of excess within fifteen (15) days of receipt of any such statement. If the contrary is the case, any such statement will be accompanied by a refund to the Tenant of any such overpayment without interest, provided that the Landlord may first deduct from such refund any rent which is then in arrears. Guarantees 31. The indemnity agreement by the Guarantor will be attached as a schedule to this Lease and will serve as a form of guarantee to this Lease. 32. The Guarantor (individually and collectively the "Guarantor") is the person who has agreed to execute the Indemnity Agreement of the Tenant's obligations and covenants in this Lease in the form attached to this Lease as Schedule "B". The Tenant, at its expense, will cause any such Guarantors to execute such Indemnity Agreement at the same time as the Tenant executes the Lease. 33. If the guarantors are shareholders of the Tenant, the Tenant will provide the Landlord with the list of its current shareholders and notify the Landlord of any new shareholders. Further, the Tenant will cause any new shareholders to enter into the Indemnity Agreement of the Tenant's obligations and covenants in this Lease in the form attached to this Lease as Schedule "B". Use and Occupation 34. The Tenant will carry on business under the name of Joe's Jeans and Skirts and will not change such name without the prior written consent of the Landlord, such consent not to be unreasonably withheld. The Tenant will open the whole of the Premises for business to the public fully fixtured, stocked and staffed on the date of commencement of the term and throughout the term, and will continuously occupy and utilize the entire Premises in the active conduct of its business in a reputable manner on such days and during such hours of business as may be determined from time to time by the Landlord. 35. The Tenant covenants that the Tenant will carry on and conduct its business from time to time carried on upon the Premises in such manner as to comply with all statutes, bylaws, rules and regulations of any federal, provincial, municipal or other competent authority and will not do anything on or in the Premises in contravention of any of them. Advance Rent and Security Deposit 36. On execution of this Lease, the Tenant will pay the Landlord advance rent (the "Advance Rent") to be held by the Landlord without interest and to be applied on account of the last instalment of Base Rent as it falls due and to be held to the extent not so applied as security for and which may be applied by the Landlord to the performance of the covenants and obligations of the Tenant under this Lease. 37. On execution of this Lease, the Tenant will pay the Landlord a security deposit equal to the amount of $9,000.00 (the "Security Deposit") to be held by the Landlord without interest. The Landlord will return the Security Deposit to the Tenant at the end of this tenancy, less such deductions as provided in this Lease but no deduction will be made for damage due to reasonable wear and tear. 38. The Tenant may not use the Security Deposit as payment for the Rent. Quiet Enjoyment 39. The Landlord covenants that on paying the Rent and performing the covenants contained in this Lease, the Tenant will peacefully and quietly have, hold, and enjoy the Premises for the agreed term.