Commercial lease agreement

COMMERCIAL PREMISES LEASE AGREEMENT

This lease agreement (hereinafter the "Agreement") is entered into in [City where the contract is signed] on [Contract date] between the following parties:

1. PARTIES

1.1 Landlord:
[Landlord's name/company]
Registry code: [Landlord's registry code]
Address: [Landlord's address]
Representative: [Name of the landlord's representative]
Telephone: [Landlord's telephone]
E-mail: [Landlord's e-mail]
Bank account (IBAN): [Landlord's bank account (IBAN)]
Role/position of the representative: [Role/position of the representative]
(hereinafter the "Landlord")

1.2 Tenant:
[Tenant's company name]
Registry code: [Tenant's registry code]
Address: [Tenant's address]
Representative: [Name of the tenant's representative]
Telephone: [Tenant's telephone]
E-mail: [Tenant's e-mail]
Role/position of the representative: [Role/position of the representative]
(hereinafter the "Tenant")

2. OBJECT OF THE LEASE

2.1 Leased premises: [Address of the leased premises], floor [Floor], area [Area (m²)] m² (hereinafter the "Commercial Premises"). Intended use: [Intended use]. A change of the intended use is permitted only with the prior consent of the Landlord.

2.2 The Commercial Premises are premises used in economic or professional activities (Law of Obligations Act (VÕS) § 272 lg 1). The terms of the Agreement also apply to things made available for the Tenant's use together with the Commercial Premises (VÕS § 272 lg 3).

2.3 The Tenant may install signs and advertising on the building, its façade or common areas only with the prior consent of the Landlord and in compliance with the requirements of legislation, and shall remove them at its own expense upon termination of the Agreement.

3. CONDITION AND DELIVERY OF THE PROPERTY

3.1 The Parties shall draw up a delivery and acceptance report to record the condition of the leased premises. The Tenant has the right to inspect the leased premises before delivery.

3.2 The Commercial Premises are deemed delivered upon signature of the delivery and acceptance report by both Parties. The report shall record the condition of the Commercial Premises, the meter readings and the keys and access devices delivered. The Commercial Premises are presumed to have been delivered in the condition described in the report (VÕS § 334 lg 1).

3.3 The Landlord shall deliver the Commercial Premises together with their accessories in a condition suitable for use in accordance with the Agreement and shall maintain them in that condition during the term of the Agreement (VÕS § 276 lg 1), taking into account the allocation of the maintenance obligation agreed in clause 9.

4. TERM AND RENEWAL OF THE AGREEMENT

4.1 This Agreement is entered into for an unspecified term, with the start date [Lease start date].

4.2 Renewal: [Renewal].

5. RENT AND PAYMENT

5.1 The rent has been agreed as a total amount: [Monthly rent (€)] euros per month.

5.2 VAT treatment: [VAT]. Payment deadline: [Rent payment deadline].

5.3 The Tenant shall pay the rent on the basis of an invoice submitted by the Landlord to the Landlord's bank account [Landlord's bank account (IBAN)]. A payment is deemed made on the day on which the amount is received in the Landlord's bank account.

5.4 The Tenant is not required to pay rent for the period during which the Tenant could not use the Commercial Premises for their intended purpose due to a defect for which the Tenant is not liable (VÕS § 296 lg 1).

6. INDEXATION OF RENT

6.1 No indexation of rent applies.

6.2 If the amount of rent changes under clause 6.1, the Landlord shall notify the Tenant of the new amount of rent and its calculation in a form which can be reproduced in writing before the first payment date of the changed rent.

7. SECURITY

7.1 No security is required under this Agreement.

7.2 If the Tenant has provided security, it secures the Landlord's claims against the Tenant arising from the Agreement, including claims for rent, ancillary costs and compensation for damage. If the Landlord has satisfied a claim from the security, the Tenant shall restore the security to the agreed extent. The Landlord shall return the security or its unused part within one month after the termination of the Agreement and the return of the Commercial Premises, deducting its due claims.

8. ANCILLARY COSTS AND COMMON AREA COSTS

8.1 Arrangement for payment of ancillary costs: [Arrangement for payment of ancillary costs]. Common area costs: [Common area costs].

8.2 The Tenant shall enter into contracts for the utility services consumed in the Commercial Premises (e.g. electricity, hot and cold water, heating, sewerage, waste collection) directly with the service providers and shall pay their invoices.

8.3 The Tenant shall pay the general costs of the common areas of the building (e.g. cleaning of common areas, heating, lighting, ventilation, security, management and building insurance) in proportion to the area of the Commercial Premises, on the basis of an invoice submitted by the Landlord.

8.4 The Tenant shall bear ancillary costs only to the extent agreed thereon in a form which can be reproduced in writing (VÕS § 292 lg 1). At the Tenant's request, the Landlord shall allow the Tenant to examine the documents evidencing the ancillary costs (VÕS § 292 lg 2). Taxes and encumbrances related to the Commercial Premises shall be borne by the Landlord (VÕS § 293).

9. MAINTENANCE OBLIGATION

9.1 Allocation of the maintenance obligation: [Allocation of the maintenance obligation].

9.2 To the extent that the Parties have not agreed on the allocation of the maintenance obligation, the Landlord shall keep the Commercial Premises in a condition suitable for use in accordance with the Agreement (VÕS § 276 lg 1), and the Tenant shall eliminate at its own expense defects which can be eliminated by minor cleaning or maintenance necessary for the ordinary preservation of the Commercial Premises (VÕS § 280).

9.3 The Tenant shall notify the Landlord without delay of any defect in the Commercial Premises, any danger to the Commercial Premises and any right of a third party to the Commercial Premises that has come to its knowledge (VÕS § 282 lg 1) and shall take reasonable measures to prevent or reduce damage. The Tenant shall compensate damage caused by a breach of the notification obligation (VÕS § 282 lg 2).

10. ALTERATIONS AND CONDITION AT THE END OF THE AGREEMENT

10.1 Right to make alterations: [Right to make alterations]. Condition at the end of the Agreement: [Condition at the end of the agreement].

10.2 The Tenant shall not make alterations or other improvements or changes in the Commercial Premises.

10.3 The Parties agree that the Landlord may demand restoration of the previous situation (VÕS § 285 lg 2): upon termination of the Agreement, the Tenant shall at its own expense restore the Commercial Premises to the condition in which it received them according to the delivery and acceptance report, taking into account ordinary wear and tear, unless the Landlord agrees to the improvements being left in place.

10.4 In carrying out construction, repair and fit-out works, the Tenant shall comply with the requirements of legislation and shall obtain the necessary permits and approvals at its own expense.

11. USE OF THE COMMERCIAL PREMISES

11.1 The Tenant shall use the Commercial Premises with care and in accordance with their intended purpose (VÕS § 276 lg 2), shall take into account the interests of the occupants of the building and the neighbours (VÕS § 276 lg 3), shall comply with sanitary, fire safety and building use requirements and shall keep the Commercial Premises clean and in order.

11.2 Representatives of the Landlord have the right, on working days, to inspect the Commercial Premises in order to check the performance of the Agreement and in the cases specified in VÕS § 283 lg 2, notifying the Tenant a reasonable time in advance and without unreasonably disturbing the Tenant's economic activities (VÕS § 283 lg 3). In the event of an emergency, the Landlord may take immediate measures to prevent damage, informing the Tenant at the first opportunity.

11.3 The Landlord shall inform the Tenant in advance of any planned interruptions of utility services known to it, shall refrain from any act or omission which may unreasonably hinder the Tenant's economic activities, and shall notify the Tenant of the transfer or encumbrance of the Commercial Premises.

11.4 The Tenant may grant the use of the Commercial Premises or a part thereof to another person only with the Landlord's prior consent; the Landlord may refuse to give consent only for good reason (VÕS § 288 lg 1–2). If the use is granted to another person, the Tenant is liable for the acts of the sub-user as for its own acts (VÕS § 288 lg 5).

12. INSURANCE

12.1 The Landlord shall insure the building.

12.2 The Tenant has an insurance obligation. Required type of insurance: [Type of insurance]. The Tenant shall keep the insurance in force throughout the term of the Agreement and shall, at the Landlord's request, submit a document evidencing it.

13. CONTRACTUAL PENALTY

13.1 In the event of a breach, a contractual penalty applies: type [Type of contractual penalty], amount [Amount of the contractual penalty]. In the case of commercial premises, a contractual penalty is permitted for breach of both monetary and non-monetary obligations and the law sets no specific percentage limit, but the amount of the contractual penalty must remain within the limits of reasonableness and good faith — a transaction contrary to good morals is void (General Part of the Civil Code Act (TsÜS) § 86). Compensation for damage may be claimed in the part exceeding the contractual penalty (VÕS § 161 lg 2); a court may reduce an unreasonably high contractual penalty (VÕS § 162).

14. LATE PAYMENT INTEREST

14.1 If the payment deadline is exceeded, late payment interest at the rate of [Late payment interest rate (%/year, freely agreed)]% per annum applies. The rate of late payment interest under a lease of commercial premises is freely agreed — unlike a residential lease, the limit of three times the statutory rate does not apply here.

15. TERMINATION OF THE AGREEMENT

15.1 Either Party may cancel an Agreement for an unspecified term in the ordinary manner with a notice period of [Notice period for ordinary cancellation] (VÕS § 311–312).

15.2 The Landlord has the right to cancel the Agreement extraordinarily if the Tenant is in delay in paying the rent or ancillary costs, or a significant part thereof, on two consecutive payment dates, or if the rent owed exceeds two months' rent, having granted the Tenant, before cancellation, an additional time limit of at least 14 days in a form which can be reproduced in writing (VÕS § 316 lg 1 and 3). The Landlord also has the right to cancel the Agreement extraordinarily by giving at least 30 days' notice if the Tenant uses the Commercial Premises contrary to their intended purpose, makes alterations contrary to the Agreement, grants the use of the Commercial Premises to another person without the Landlord's consent or otherwise breaches the obligation to use the Commercial Premises with care, and continues the breach despite the Landlord's warning, or the breach is material or intentional; in the event of intentional damage to the Commercial Premises, the notice period need not be observed (VÕS § 315).

15.3 The Tenant has the right to cancel the Agreement extraordinarily if the leased premises become unfit for use or the Landlord breaches its obligations to a significant extent, including if the Tenant is unable to use the Commercial Premises for a reason arising from the Landlord and the Landlord has not enabled their use within a reasonable time limit granted to it (VÕS § 314 lg 1). Either Party may cancel the Agreement for any other good reason (VÕS § 313 lg 1).

15.4 In the event of early termination, a fee applies: type [Type of fee], amount [Amount of the fee]. The fee does not apply if the Agreement is cancelled extraordinarily due to a breach of the Agreement by the other Party.

15.5 The notice of cancellation must be in a form which can be reproduced in writing. The Landlord's notice of cancellation shall specify at least the Commercial Premises, the date of termination of the Agreement and the ground for cancellation; a cancellation not complying with the requirements is void (VÕS § 325 lg 1, 2 and 5).

15.6 Upon the transfer of the Commercial Premises, the rights and obligations of the Landlord pass to the acquirer (VÕS § 291 lg 1). The acquirer may cancel the Agreement within three months, observing the statutory notice period, only if the acquirer urgently needs the Commercial Premises for its own use (VÕS § 323 lg 1).

16. RETURN OF THE PROPERTY

16.1 Upon termination of the Agreement, the Tenant shall return the leased premises in accordance with the condition specified in clause 10.3, remove its furnishings, clean the premises and return the keys to the Landlord with a delivery and acceptance report.

16.2 The Tenant is not liable for ordinary wear and tear, deterioration and changes of the Commercial Premises resulting from their use in accordance with the Agreement, but is liable for other damage unless the Tenant proves that it occurred in circumstances which did not arise from the Tenant or from a person to whom the Tenant transferred the use of the Commercial Premises in accordance with the Agreement (VÕS § 334 lg 2).

16.3 Upon return, the Landlord shall inspect the Commercial Premises and notify the Tenant without delay of defects for which the Tenant is liable (VÕS § 336). If the Tenant fails to return the Commercial Premises on time, the Landlord may claim, as compensation for damage, the agreed rent for the period of delay and compensation for damage exceeding it (VÕS § 335).

17. NOTATION IN THE LAND REGISTER

17.1 A notation concerning this Agreement shall be entered in the land register, and the Parties shall make the declarations of intent necessary for this. The notation ensures that every owner of the immovable must allow the Tenant to use the Commercial Premises in accordance with the Agreement and that a new owner has no right to cancel the Agreement under VÕS § 323 (VÕS § 324 lg 2). The extent of protection afforded by the notation depends on its ranking in the land register in relation to other rights and encumbrances established on the same immovable.

18. FORCE MAJEURE

18.1 A Party shall not be liable for a breach of obligations arising from the Agreement if the breach is excusable due to force majeure (VÕS § 103). A Party shall notify the other Party of a circumstance of force majeure without delay.

19. NOTICES AND CONFIDENTIALITY

19.1 Notices related to the Agreement which have legal consequences shall be given in writing or in a form which can be reproduced in writing (including by e-mail) at the addresses specified in the Agreement. Notices of a purely informative nature may be communicated by telephone. A Party shall notify any change in its contact details without delay.

19.2 The terms of the Agreement and non-public information about the other Party which has become known in the course of performance of the Agreement are confidential, except in the cases provided by legislation or to the extent necessary for the performance of the Agreement.

20. DISPUTE RESOLUTION

20.1 Before applying to a court or arbitration, the Parties shall try to resolve the dispute through negotiations. Failing agreement, the dispute shall be resolved as follows: [Dispute resolution]. Arbitration applies on the basis of an agreement of the Parties. The law of the Republic of Estonia applies.

21. FINAL PROVISIONS

21.1 Amendments to the Agreement shall be made in writing or in a form which can be reproduced in writing. The Tenant may transfer the rights and obligations arising from the Agreement only with the Landlord's consent given in the same form (VÕS § 290 lg 1).

21.2 If any provision of the Agreement is invalid, this shall not affect the validity of the remaining provisions. The Agreement (together with its annexes) constitutes the entire agreement between the Parties. The Agreement enters into force once both Parties have signed it.

22. LEGAL BASIS

22.1 A lease of commercial premises is governed by §§ 271–338 of the Law of Obligations Act, including §§ 311–316.

22.2 Unlike a residential lease, freedom of contract applies to a lease of commercial premises — the Parties may freely agree on most of the terms of this Agreement.