Free Rent Period (Commercial Lease) (Pro-Landlord)

by Practical Law Real Estate

A Standard Clause for use in a commercial real estate lease agreement to detail a tenant's right to free rent at the beginning of the lease term. This Standard Clause favors the landlord but contains integrated notes with important explanations and drafting and negotiating tips for landlords and tenants. A Standard Clause for use in a commercial real estate lease to grant a tenant a free rent period at the beginning of the lease term. This pro-landlord clause defines the timing and scope of the rent abatement, typically limiting the concession to base rent while requiring the tenant to continue paying all other monetary obligations, such as their share of operating expenses and utilities. This Standard Clause explores the benefits of offering rent concessions to attract desirable tenants and outlines key considerations for drafting these provisions. It also provides landlord-favorable language for the recapture of the free rent amount if the tenant defaults on the lease agreement. While commercial real estate leases are generally governed by state law, this jurisdictionally neutral Standard Clause is useful and relevant in every state.