Oregon Commercial Lease Agreement

Commercial leases define the relationship between a landlord and a tenant using the property for business. As with any lease, you must be aware of multiple laws and legal terms when creating a commercial agreement. We consider the most essential laws to add to an Oregon commercial lease agreement.

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Oregon Commercial Lease Agreement

Security Deposit Limits and Handling

  • Landlords can keep the security deposit in any account, even with other funds, as there are no laws regarding keeping it separate.
  • Commercial security deposits in Oregon don’t have a maximum limit. As such, the landlord can ask whatever amount they deem reasonable.
  • There aren’t many laws regarding security deposits for commercial properties. However, most landlords will abide by the residential rule of returning a security deposit within 31 days.

Right of Entry for Inspections and Repairs

  • Unlike residential agreements, there are no specific laws regarding the right of entry for commercial contracts. 
  • The consensus is that the lessor must provide at least 24 hours’ notice to enter the property. The only exception is if it’s an emergency.
  • When the landlord gives a notice of inspection, the tenant has no right to refuse. However, the lessor must conduct this inspection during business hours.
  • Repairs have no specific laws governing them. The conditions can vary depending on the type of commercial lease. Before the lease starts, the landlord usually ensures the property is in good repair. Once the lease is active, the tenant is responsible for keeping it in good repair.

Environmental Responsibilities

  • Landlords have to ensure they’re not liable for any violations of environmental regulations the tenant might make. As such, they often add a clause that explains the property’s environmental systems and rules.
  • They can also add a clause stating that the lessee cannot use the property for any business using, storing, or otherwise interacting with hazardous material/waste.
  • The landlord must ensure there isn’t an existing environmental issue at the contract’s start. If there’s one, they must inform the lessee about it and any procedures that will take place to address it.
  • If the landlord finds out about any environmental violations, they can immediately enter the premises to correct them. If the violation is due to the tenant’s actions or business, then it can be considered an act of default.

Notice Requirements

  • Notice periods differ depending on the agreement type. It can range from no notice required or 30 days to 60 or 90 days.
  • An early termination clause must often be in the contract for a fixed-term agreement to end before the agreed-upon date. It can require the lessee to pay various penalties, such as the rest of the rent or expenses for advertising and screening new tenants.

Include Required Disclosures

Oregon has various disclosures that lessors must add to an agreement. If the following disclosures aren’t present, it might render the contract invalid.

  • Information of the Commercial Property Owner
  • Flood Hazard Information
  • Lead-Based Paint Disclosure
  • Smoke Detectors and Carbon Monoxide Disclosure