New Jersey (NJ) Commercial Lease Agreement

Security Deposit Limits and Handling

• Commercial security deposits have no limits, unlike residential ones. Lessors can ask whatever they believe is reasonable.
• Lessors aren’t required to hold the security deposit in a separate account, so you can keep it in any account, even if it contains other funds.
• Tenants aren’t entitled to interest on the security deposit, so lessors don’t need to bear any interest.
• There are no specific laws regarding when the landlord must return the security deposit. Still, most landlords will add a 30-day return clause in the contract.

Right of Entry for Inspections and Repairs

• Generally, lessors will add a clause that states they can enter the premises with adequate notice. Reasonable notice for entering the property is typically between 24 and 72 hours.
• Unlike with residences, the landlord doesn’t need permission from the tenant if the right of entry is for inspections, but they must still provide a 24-hour notice with a specific time of entry.
• Lessors must ensure their property satisfies all OSHA (Occupational Safety and Health Administration) regulations.
• Lessees have the responsibility to maintain the premises in good condition. Any damages caused by their business, employees, or customers are their responsibility to repair.
• For long-term leases, the upkeep and maintenance of the property will fall to the lessee, not the lessor.

Environmental Responsibilities

• Landlords are responsible for ensuring their property satisfies all environmental regulations. They’ll add a clause stating the tenant’s responsibility towards these regulations.
• If the lessor has any knowledge of environmental issues on the property, they must notify the lessee.
• Let’s say the lessee deals with hazardous waste or other such material. In that case, the tenant must hire a professional contractor or make similar arrangements. It ensures they follow the federal, state, and local environmental laws.
• The landlord can indemnify the lessee if they know of pre-existing environmental issues. However, it’s not required. They can also allow the tenant to do their due diligence.

Notice Requirements

• Weekly agreements have a seven (7) day notice period. You must notify the other party 30 days in advance for monthly contracts. Yearly commercial leases generally have a three (3) month notice period, while fixed-term leases have no notice period.
• The end date is final for leases with a fixed term unless the tenant or lessor has a reasonable excuse. Otherwise, the lessor can implement penalties, or the lessee can sue the landlord.
• If the tenant breaks the agreement before the fixed end date, the lessor can file a lawsuit with the small claims court. 
• Other penalties are losing the security deposit, paying all the outstanding rent, or paying a penalty fee.

Include Required Disclosures

This state only has one disclosure you need to remember.

• Lead-Based Paint: Lessors must disclose if lead-based paint is present in buildings older than 1978.