Colorado Commercial Lease Agreement

A Colorado commercial lease agreement is a legally binding document that establishes the terms and conditions for the rental of commercial property in the state of Colorado. This contract outlines key details such as rent amounts, lease duration, maintenance responsibilities, and other provisions relevant to commercial leasing within the state.

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Colorado Commercial Lease Agreement

Key General Provisions

A Colorado commercial lease agreement includes some key general provision typical for other states.

  • Parties to the Lease
  • Description of the Premises
  • Commercial Lease Term
  • Rent and Payment Terms
  • Security Deposit
  • Use of Premises
  • Maintenance and Repairs
  • Insurance
  • Termination
  • Indemnification
  • Compliance with Laws

However, the state has specific regulation for handing abandoned commercial property and marijuana use covered below.

Procedures for Handling Abandoned Commercial Property

  • A landlord can only declare a property abandoned if they receive evidence. This evidence can include an abandonment letter, the return of the keys, or the removal of personal effects. It can also include extended absences with unpaid rent and no communication.
  • Generally, the tenant must have abandoned the building for more than 30 days. 
  • Abandonment is the exception to needing a court order when retaking possession of the property. However, sending a 15-day possession notification to the lessee’s last known address is still best. This notice will tell them of your intent to retake possession of the building and lease it to another.
  • If a lessee abandons the commercial lease, they’re still liable for early termination penalties.
  • These penalties can include paying all the rent due according to the contract. It can also mean paying advertising expenses to find a new tenant.

Regulations Regarding Marijuana Use on Leased Commercial Premises

  • It’s not illegal to lease premises to a tenant who commercially sells marijuana, otherwise known as cannabis. However, there are various considerations you must make.
  • The lessor must ensure the tenant has proper licensing to sell cannabis. Without this license, the sale of marijuana will be illegal, which means the lessor might be dragged into unlawful activities.
  • Lessors should check their financial loan terms. Any existing loan might default if they’re involved with the marijuana business.
  • Landlords should be aware that tenants commercially selling cannabis might have to alter the property. The alterations will be to ensure the building fulfills all licensing requirements. If the landlord isn’t willing to have modifications done, then it’s best not to lease to tenants in this business.
  • Landlords can become classified as CBOs (controlling-beneficial owners) or PBOs (passive-controlling owners). This is because the rent they receive comes from the tenant’s marijuana revenue.
  • If the lessor becomes a CBO, they might be vetted by the appropriate department. It means they can become subject to specific laws they might not know.