An Oklahoma Commercial Lease Agreement essentially forms a reciprocally enforceable agreement between tenant and property owner. This treaty grants you the entitlement to utilize a premises for your entrepreneurial undertakings, for a stipulated duration and cost. It's refined to the specific operations your trade aims to conduct therein. Assure complete comprehension of every clause prior to putting your signature.
Title 12A, Article 2A of our jurisdiction's Uniform Commercial Code is expressly vested with lease matters. This covers a variety of protocols, terminologies, and stipulations pertinent to the creation, amendment, implementation, and violation of lease contracts.
As illustrated in some portions of the article:
Read on to learn more about Oklahoma Commercial Lease Agreement, including:
Here are some key components that are typically included in an Oklahoma Commercial Lease Agreement:
Being an enterprise proprietor, you might be overwhelmed with the intricate legal verbiage involved. Yet, armed with a transparent plan and proper assistance, you can confidently formulate your lease agreement. Let's delve into the fundamentals of a commercial lease contract, and understand ways to mold it for your requirements - envision this as your amiable, uncomplicated navigation tool for the realm of commercial leases.
The "Approved Uses" provision signifies the manner in which the rented property might be utilized. It concisely delineates the acceptable activities, such as manufacturing procedures, administrative tasks, warehousing, dissemination, and developing and distributing goods.
It's essential to meticulously itemize all your planned commercial endeavors in this section. This precision averts possible legal complications and guarantees effective allocation of resources. Incorporate exhaustive specifics to prevent unanticipated occurrences. This comprehension maintains your company's progression.
Industrial and light manufacturing, warehousing, office, distribution, and assembly, including designing, manufacturing and distributing branded merchandise and promotional products, including all activities incident or ancillary thereto and all other lawful uses and purposes.
(a) This pertains to the lease duration and prolongations. Commencing on the Effective Date, it culminates on the Expiration Date. You're enabled to lengthen it for an additional two-year period on two occasions, subject to the existing terms, albeit rent might escalate. To extend, dispatch written notice to the landlord 30 days prior to term completion.
(b) "Term" denotes both the original lease phase and any subsequent extensions.
Unambiguous lease stipulations are vital for orchestrating your business strategies and functioning while considering potential extensions. So, remember to pay close attention to these details.
(a) The initial term of this Lease will commence on the Effective Date and expire on the Expiration Date. The Tenant may extend the Term of this Lease for [two] additional [two]-year extension term(s), on all the same terms and conditions (except for Rent, which will increase during extension Terms as provided below) contained in this Lease, by notifying the Landlord in writing of the Tenant’s election to do so not less than 30 days before the expiration date of the then-current Term, as the case may be.
(b) The initial term and any applicable extension term are referred to in this Lease as the “Term.”
The "Upkeep and Maintenance" stipulation elucidates upon who takes charge of repairs. It encompasses both interior and exterior dilemmas, such as malfunctioning plumbing systems or impaired stonework. The expenditure is borne by the property owner, not you.
In instances where a repair isn't tackled promptly, you hold the prerogative to arrange for repair work and deduct the cost from your rent. Remember to always record these occurrences for future perusal. Understand, this provision proves crucial, as it demarcates responsibilities regarding repairs and safeguards you from unforeseen outlays.
From and after the Effective Date, and for the remainder of the Term, the Landlord shall perform ordinary maintenance and repair of the interior of the improvements on the Premises. In addition, the Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to, the exterior walls, building slabs, foundations, structural parts and components, parking lots, gutters, downspouts, roof, roof membrane and coverings and any other part, component or system on the exterior of the Premises. The Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to the sprinkler system, mechanical, HVAC, electrical and plumbing systems of the Premises. If the Landlord fails to perform any repair or replacement required to be made by the Landlord in this Lease, and the Landlord fails to cure such failure within 15 days after receipt of a written demand from the Tenant (or immediately, in the case of emergency repairs, including loss of heating and air conditioning), then the Tenant may make such repair or replacement and the Landlord shall reimburse the Tenant for the cost thereof. If the Landlord fails to pay such amount, then the Tenant may offset against the Rent due hereunder the amount so expended.
"Modifications" specifies your entitlements to diversify the leased space. You can enact changes independently of landlord approval, but notable transformations are deemed the property of the landlord. You are at liberty to displace personal items like racking systems or machinery provided it doesn't compromise the condition of the premises. Grasping this provision can circumvent contention and aid you in effectively strategizing your business setup.
The Tenant may, at its own cost and expense and in a good workmanlike manner, make such alterations, additions, or improvements or erect, remove, or alter such partitions, or erect such racks, shelves, bins, machinery, furniture, fixtures, trade fixtures, equipment, and other personal property as it may deem advisable, without the consent of the Landlord. All fixtures and permanent alterations, additions, improvements, and partitions erected by the Tenant will be and remain the property of the Landlord during the Term, and will be abandoned by the Tenant at the expiration of this Lease. All racks, shelves, bins, machinery, furniture, equipment, and other personal property located in the Premises as of the Effective Date or otherwise installed by the Tenant may be removed by the Tenant at any time if the Tenant so elects. All such removals and restoration shall be accomplished so as not to damage the primary structure or structural qualities of the buildings and other improvements situated on the Premises.
The "Insurance" provision safeguards both the lessee and lessor. As the occupant, it's essential to acquire property and liability insurance, designating the landlord as added insured. The landlord is responsible for covering insurance pertaining to property damages.
The concept of 'waivers of subrogation' prevents insurance providers from pursuing reimbursement from the opposite party following a loss. Your insurance carrier should inform the landlord of any cancellations 30 days in advance. Familiarizing yourself with these clauses strengthens your business's financial security. So, grab a cup of coffee, and remember to explore these terms while discussing the lease with your friend or advisor.
(a) At all times during the Term, the Tenant shall maintain, at its sole cost and expense, policies of insurance containing the following insurance coverages (which policies shall name the Landlord as an additional insured):
(1) Property insurance with premiums paid in advance insuring the Tenant’s property using the standard Special Causes of Loss Form or equivalent for the full replacement value. The foregoing is referred to in this Lease as “Property Insurance.”
(2) Commercial general liability insurance with respect to the Premises in amounts not less than $1,000,000 per occurrence, $2,000,000 aggregate limit using current ISO forms or equivalent.
(b) The Landlord shall obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having a lien on the Property), and special extended perils ("all risk" as such term is used in the insurance industry). Such insurance must provide for a payment of loss thereunder to the Landlord or to the holder of mortgages or deeds of trust on the Premises.
(c) The policies required by this section must provide for standard waivers of any right of subrogation that the insurer of such party may acquire against the other party to this Lease, for losses that are actually insured against, even if the loss results from a negligent act or omission. The Tenant’s insurance company must provide the Landlord with a certificate of insurance on form ACORD-27 (for Property Insurance required to be carried under this Lease), or its equivalent, and ACORD-25 (for liability insurance required to be carried under this Lease), or its equivalent, which provides that the insurance may not be cancelled without giving the named insured at least 30 days’ prior written notice (or at least ten days’ written notice of cancellation in the event of the non-payment of premium). The Tenant may carry any required insurance under a blanket policy if that policy complies with the requirements of this Lease.
The "Instances of Default" provision enumerates actions that are deemed as violations of your lease. Common instances encompass failing to remit rent payments, confronting bankruptcy, or neglecting to adhere to lease terms. Recognize this section and bypass these mishaps to preserve an amicable relationship with your landlord and seamlessly conduct your business.
The following events will be deemed to be Events of Default by the Tenant under this Lease:
(1) The Tenant fails to pay any installment of the Rent hereby reserved when due, or any other payment or reimbursement to the Landlord required under this Lease when due, and such failure continues for a period of 30 days after the Tenant’s receipt of written notice of such nonpayment;
(2) The Tenant becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors;
(3) The Tenant files a bankruptcy petition or Tenant is adjudged bankrupt or insolvent in proceedings filed against the Tenant;
(4) A receiver or trustee is appointed for all or substantially all of the assets of the Tenant; and
(5) The Tenant fails to comply with any term, provision, or covenant of this Lease (other than the foregoing in this section 18), and does not cure such failure within 30 days after written notice thereof to the Tenant, or such longer period as may be necessary to cure such default provided the Tenant has promptly commenced curing such default and is diligently proceeding to obtain such cure.
The "Persisting Tenancy" provision addresses instances where you exceed your lease's duration. Failing to vacate at the conclusion of your lease term will result in a penalty, usually equivalent to 125% of the standard rent, for each month of overstaying. Comprehend the implications of an extended stay and strategize your departure plan keeping this information in mind.
If the Tenant holds over after the expiration of the Term and does not surrender the Premises prior to the expiration of the Term, then for each such month that the Tenant is holding over, the Tenant shall pay to Landlord 125% of the Rent due under this Lease for each month.
Upon the cessation of a commercial lease agreement, several outcomes are plausible. Here are some resources which delineate potential courses of actions:
Indeed, liabilities accrued from prematurely terminating a commercial lease agreement can differ, but there are a few recurrent penalties:
Given the intricacies of penalties may diverge based on the lease agreement, shrewdly reviewing the lease contract to grasp the exact stipulations involved in early termination is indispensable.
