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Commercial Lease Agreement in the US

United States commercial leases are largely a matter of freedom of contract, and the protections that apply to homes generally do not apply. Texas illustrates the point: a commercial landlord may change the locks of a tenant delinquent in rent without going to court, and the lease overrides the statute to the extent of any conflict. California is now the outlier, requiring a Certified Access Specialist disclosure in every commercial lease and, since 1 January 2025, restricting how operating costs may be recovered from small business and nonprofit tenants.

Governing law

State property and contract law governs commercial tenancies, with far fewer mandatory terms than residential law. Federal law contributes accessibility obligations under the Americans with Disabilities Act.

Americans with Disabilities Act, 42 U.S.C. § 12183

What a commercial lease agreement has to contain in the US

  • A California commercial property owner or lessor must state on every lease form or rental agreement executed on or after 1 January 2017 whether or not the premises have undergone inspection by a Certified Access Specialist.

    Cal. Civ. Code § 1938(a)

  • Where a CASp inspection has taken place, correcting violations noted in the report is presumed to be the lessor's responsibility unless the parties mutually agree otherwise, and the prospective tenant must have the chance to review the report before execution.

    Cal. Civ. Code § 1938(c)

  • Since 1 January 2025 a California landlord may not charge a qualified commercial tenant a fee to recover building operating costs unless the costs are proportionately allocated with supporting documentation, were incurred in the previous 18 months or are reasonably expected within the next 12, and the tenant had pre-execution notice of its inspection right.

    Cal. Civ. Code § 1950.9(a), added by S.B. 1103 (2024)

  • A qualified commercial tenant is a microenterprise, a restaurant with fewer than 10 employees, or a nonprofit with fewer than 20 employees, that has given the landlord written notice and a self-attestation of employee numbers before or on execution and annually thereafter.

    Cal. Civ. Code § 1950.9(h)(5)

  • In Texas a landlord may exclude a commercial tenant without judicial process by changing the door locks where the tenant is delinquent in paying at least part of the rent, provided a written notice on the front door states where the new key may be obtained.

    Tex. Prop. Code § 93.002(c)(3) and (f)

Form, notarisation and registration

What catches drafters out

  • The Texas commercial lockout section is expressly subordinate to the lease: a lease supersedes the section to the extent of any conflict, so the allocation of self-help remedies is decided by drafting rather than by statute.

    Tex. Prop. Code § 93.002(h)

  • A California landlord may not change the method or formula used to allocate building operating costs to a qualified commercial tenant in a way that increases that tenant's share without written notice and supporting documentation of the basis.

    Cal. Civ. Code § 1950.9(c)

Commercial Lease Agreement in the US: common questions

Must a US commercial lease disclose accessibility status?
In California, yes. Civil Code § 1938(a) requires a commercial property owner or lessor to state on every lease form or rental agreement executed on or after 1 January 2017 whether or not the premises have been inspected by a Certified Access Specialist. Section 1938(c) then presumes that correcting violations noted in a CASp report is the lessor's responsibility unless the parties mutually agree otherwise, which makes the allocation clause commercially significant.
Can a US commercial landlord lock out a tenant for non-payment?
In Texas it can. Property Code § 93.002(c)(3) permits a landlord to prevent a commercial tenant from entering the premises without judicial process by changing the door locks where the tenant is delinquent in paying at least part of the rent, and § 93.002(f) requires a written notice on the front door saying where the new key can be obtained. Section 93.002(h) provides that a lease supersedes the section to the extent of any conflict.
Are there small business protections in US commercial leases?
California introduced some with effect from 1 January 2025. Civil Code § 1950.9(a) restricts recovery of building operating costs from a qualified commercial tenant unless the costs are proportionately allocated, recently incurred or reasonably expected, and supported by documentation the tenant was told before execution it could inspect. Section 1950.9(h)(5) limits the protection to microenterprises, restaurants with fewer than 10 employees and nonprofits with fewer than 20, who self-attest annually.

Sources

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