Vermont Commercial Lease Agreement

When leasing a commercial property, the tenant leases it for business purposes. Commercial lessors have fewer restrictions than residential lessors. However, that doesn’t mean there are no laws that lessors should consider when creating a Vermont commercial lease agreement.

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Vermont Commercial Lease Agreement

Implied Covenant of Good Faith and Fair Dealing

Vermont laws state that commercial agreements are made in good faith. This good faith means that both parties will fulfill the reasonable commercial standings of fair dealing during the contract period.

Statutory Notice Periods

  • Should one of the parties breach the contract, the other party can send a notice for them to correct the violation.
  • Should the party not correct the violation within 30 days of the notice receipt, the other party can repudiate the lease.
  • The laws surrounding notice periods in Vermont aren’t specific. However, most lessors follow the statutory notice period for fixed leases, which is 60 days.

Security Deposits

  • Landlords can primarily treat the security deposit however they want. There’s no limit to how much they can ask.
  • There’s also no account requirement for how they store it.
  • Lessors don’t need to bear interest on the deposit, which is why there’s no specific account they must store it. As such, landlords can even keep the security deposit with other funds.
  • Thanks to the above laws, commercial landlords don’t need to pay any interest to the tenants.
  • Most landlords comply with the state’s security deposit residential laws surrounding non-primary residences. These laws state that the landlord must return the deposit within 60 days of the termination of the lease.


Vermont laws aren’t clear about the required disclosures for commercial leases. To be safe, most lessors add the following disclosure:

  • Lead-Based Paint: A landlord of a building older than 1978 must disclose whether there’s lead-based paint present. This disclosure must also include hazards of the paint.
  • Rent Increase: Most commercial agreements will have specific clauses regarding when the lessor can raise the rent. At the very least, there must be a 60-day notice period. Sometimes, lessors can only increase or renegotiate the rent when the parties renew the contract.

Termination and Renewal

  • Most landlords follow the same notice period regarding terminations that residential lessors use.
  • Lessors must give tenants, or the other way around, 60 days’ notice if the lease has been effective for two (2) or fewer years.
  • Landlords must provide a 90-day notice if the tenant has used the property for over two (2) years.
  • There are no specific laws surrounding how you can renew the lease. The lessor can add their terms as they wish. However, the lessor must be detailed. Specific clauses include the term of the lease’s renewed state, how many times, and whether the parties will renegotiate the rent.