It can be challenging to find an ideal tenant for your commercial property. For one, there are many things to consider. Before signing a commercial rental agreement, the first step is to get all interested parties to fill out and sign a Commercial Rental Application.
With a Commercial Rental Application, the landlord can better screen prospective business tenants before selecting the most promising. An unwritten rule is such that the first applicant that checks all the boxes on the application would be selected to enter into a Commercial Rental Agreement, as all landlords would want to find a tenant as soon as possible.
There is not any significant difference between a Residential and a Commercial Rental Application. Except that a commercial tenant usually will have to go through a more thorough screening. A landlord will want to have access to things like business reports, references, credit and background checks, and even to interview the applicant.
Just like renting to an individual, it is unlawful for a landlord to discriminate against a business based on the inherent characteristics of the owner or employees. According to best practice, you want to start with a questionnaire or template and avoid any personal questions.
Depending on your state and type of commercial property owned, a Commercial Rental Application may also be known as:
Commercial Lease Application
Retail Lease Application
Business Lease Application
Commercial Tenant Information Form
Commercial Property Application
Owners of commercial properties use Commercial Rental Applications to document prospective business tenants and receive all information necessary to select the most suitable tenant.
Even though tenants are likely to undergo an interview when leasing a commercial property, the application allows things to move a bit quicker. A landlord uses the applications to narrow down prospects and perhaps select the most promising for an interview before beginning the process of negotiating and entering into a Commercial Rental Agreement with the final choice of tenant.
Conversely, it is also relevant to point out that the Commercial Rental Application also serves the tenants. The application speaks on their behalf and they would not have to compete for a desirable commercial property in another manner.
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A Commercial Rental Application would contain a host of information. In trying to create one yourself, there’s a chance that you might omit something critical to know. An improper application can even result in you having to retain legal services. There is a much better way…
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To create your document, please provide:
Business Information: the applicant’s company name, current address, and duration of the lease
Business Owner Information: the owner’s legal name, address, contact, social security number, driver’s license number (if applicable)
Landlord’s Information: name, address, and contact information of the landlord
Previous landlord information: name and contact information of the applicant’s previous landlord
Nature of the business: the applicant’s industry, business model, and operations
Bank Information: the bank that the applicant does business with and if applicable, the account types and numbers
Credit references: the applicant’s statement of assets, letter from a previous landlord, etc.
Business balance sheet: the applicant’s most current balance sheets, audited or otherwise
Information on bankruptcy: the applicant would note any past bankruptcies (which you can verify later either way)
Lease duration: the landlord’s desired lease term (may be negotiable)
Amount of rent: the landlord’s asking monthly rent (may be negotiable)
Authorization: signed authorization for the landlord to perform a credit inquiry
Signature: the applicant’s signature
Lease: In the context of a Commercial Rental Application, contract between landlord or person or business
Property manager: the person who maintains and manages the commercial property in question for the landlord (if applicable)
Security deposit: In the context of a Commercial Rental Application, this is an advance payment to a landlord to reserve the property as the application is being processed
Right of entry: the landlord’s right to enter a leased property as specified in state laws
After filling out a Commercial Rental Application, the applicant will have to sign it. There is no need to notarize the document, nor is there a need for the landlord to sign it since only one party is providing information and the application is not a contract of any kind, but rather the first step to leasing a commercial property.
With the completed Commercial Rental Application in hand, the next step is to use one of the services available to verify the information. As a commercial landlord, you can go through a landlord association or directly to a credit bureau, and you can even ask the application to supply everything.
Most landlords choose to make prospective tenants fill out an application. In particular, a commercial landlord would not agree to take on a business tenant without the proper checks and documentation, seeing as a commercial lease usually runs for a good number of years.
Tenants, particularly commercial tenants, can negotiate terms but this is usually not done at the application stage but rather the rental agreement stage, during which both parties will be able to go into details of the lease and negotiate the terms.
The short answer is yes. A landlord reserves the right to reject any application if deemed unsatisfactory or unsuitable. However, to avoid legal complications, they should provide the reason or reasons, of which bad credit scores and other unflattering public records are the most common.
Also known as an offer to lease, prospective commercial tenants create it for submission with a Commercial Rental Application to signal a clear intent to lease the property. It usually contains an offer from the tenant and an outline of the future agreement.
Any potential lease violation or notice of lease violation can be brought up at the Commercial Rental Application stage. But it is strictly used after the property has been rented and the tenant is to violate any terms of the lease agreement. Landlords may put up with minor violations and only issue a formal notice for nonreceipt of rent.
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