Commercial Lease
A contract by which a property owner grants a tenant the right to use specified real property for commercial purposes for a defined term in exchange for rent. Governed by Texas common law and specific statutory provisions, distinct from the more heavily-regulated residential framework.
A commercial lease is a contract by which a property owner (the "landlord" or "lessor") grants a tenant (the "lessee") the right to use specified real property for commercial purposes for a defined term in exchange for rent. Commercial leases are governed by Texas common law and specific statutory provisions, distinct from the more heavily-regulated framework applicable to residential tenancies.
Lease structures
Gross lease: tenant pays a fixed rent; landlord pays operating expenses, taxes, insurance, and maintenance.
Net lease: tenant pays base rent plus some operating expenses. Variations: single-net (tenant pays property taxes), double-net (tenant pays taxes and insurance), triple-net (tenant pays taxes, insurance, and maintenance, common in retail and industrial).
Modified gross / modified net: hybrid structures specifying which expenses are tenant- vs landlord-paid.
Key commercial-lease provisions
(1) Premises description and use restrictions; (2) base rent and rent escalations (CPI, fixed bumps, market resets); (3) common-area maintenance (CAM) charges and reconciliation; (4) operating expense pass-throughs and audit rights; (5) tenant improvements and allowance; (6) renewal options; (7) assignment and subletting restrictions; (8) default and remedies; (9) personal guaranty (typical for closely-held tenants).
Texas-specific considerations
Texas does not regulate commercial rent, and commercial leases are largely freedom-of-contract documents. Some statutory rules still apply, including limits on lockouts and utility interruptions (Tex. Prop. Code § 93.002), security-deposit rules (§§ 93.004-93.011) and a landlord's duty to mitigate that a lease cannot waive (§ 91.006). The Texas landlord's lien (Tex. Prop. Code § 54.021) gives a landlord of a building leased for nonresidential use a preference lien on the tenant's property in the building for rent due and rent to become due during the current 12-month period, supplementing contractual remedies. The lien is unenforceable for rent more than six months past due unless the landlord files a verified lien statement (§ 54.022). Termination of a commercial lease generally follows the lease's notice provisions. Where there is no fixed term, the statutory month-to-month notice rule in Tex. Prop. Code § 91.001 applies to commercial and residential tenancies alike unless the parties have agreed otherwise in an instrument signed by both.
Commercial-lease negotiation focuses on (1) operating expense and pass-through definitions (CAM caps, exclusions); (2) tenant improvements and landlord work obligations; (3) renewal and termination options; (4) personal guaranty scope and duration. Sophisticated tenant-side practice involves audit rights, exclusive-use protections, and clear assignment/subletting carve-outs for affiliates and successors.