A Commercial Lease Application serves as a crucial tool for landlords or property managers seeking to evaluate potential tenants for commercial rental properties. Unlike residential leases, commercial leases cater to businesses engaging in income-generating activities. In this blog, we'll delve into the intricacies of Commercial Lease Applications, their significance, and provide insights into the approval or denial process.

Table of Contents

• Understanding Commercial Lease Applications: A Closer Look
• When to Use a Commercial Rental Application?
• Approving or Declining a Commercial Lease Agreement
• What Can a Landlord Ask on a Commercial Lease Application?
• How to Write a Commercial Lease Application Form?
• Frequently Asked Questions
• How is a Commercial Lease Application Different from a Residential Lease Application?
• Why is Proper Documentation Important in the Commercial Lease Application Process?
• Commercial Lease Application Sample

Understanding Commercial Lease Applications: A Closer Look

Commercial real estate encompasses various categories, including retail space, industrial buildings, office rentals, and multi-family housing complexes. When leasing out commercial space, property owners often require prospective tenants to complete a Commercial Lease Application. This form, also known as a Commercial Tenant Information Form, Retail Lease Application, or Business Rental Application Form, assists in screening tenants effectively.

When to Use a Commercial Rental Application?

Owners of commercial real estate, spanning strip malls, high-rise buildings, factories, warehouses, shopping malls, and more, should utilize a Commercial Lease Application. This step is crucial to evaluating potential tenants for business-related rentals. Typical applicants include retail businesses, childcare facilities, hotels, professional offices, service providers, restaurants, and various other commercial enterprises.

Why Use a Commercial Lease Application?
To make an informed decision on leasing commercial space, landlords must assess the viability of the tenant as a business investment. A well-drafted Commercial Lease Application provides essential data, including financials and rental history, aiding property owners in the decision-making process.

Approving or Declining a Commercial Lease Agreement

Upon approval of a Commercial Lease Application, prompt communication with the applicant is essential. Sending an Application Approval Letter and the Commercial Lease Agreement streamlines the leasing process. If denial is necessary, it's crucial to provide reasons, adhering to legal requirements and sending a rejection letter to the applicant.

Screening a Commercial Rental Applicant: A Step-by-Step Guide

1. Use our step-by-step builder to create a Commercial Real Estate Application.
2. Have the applicant fill out, sign, and date the form, including business name, details, and financial information.
3. Collect a commercial lease application fee if applicable.
4. Review the prospective tenant’s information.
5. Verify the business with the appropriate Secretary of State.
6. Obtain the business and principal's credit scores.
7. Perform background checks on business owners or principals.
8. Contact applicant references and check rental history.
9. Review company assets and financial statements.
10. Review any guarantor’s information.
11. Approve or decline the applicant.

What Can a Landlord Ask on a Commercial Lease Application?

While screening commercial tenants, landlords should limit inquiries to essential information:

• Business Name and Structure
• Intended Use of the Space
• Previous Rental Information
• Business Owner Information
• Business Banking Information
• Credit References
• Authorization to Perform a Credit or Background Check

By adhering to these guidelines, landlords can gather necessary information without risking legal complications.

How to Write a Commercial Lease Application Form?

A commercial lease application should consist of the following:

Step 1 – Fill in Basic Information About the Property

A business rental application form needs to summarize basic information about the property the landlord is renting:

1. Date of Application
2. Landlord Name
3. Property Address (physical street address including any unit number)
4. Property Square Footage

Step 2 – Enter Business Applicant Information

The next section of a commercial property application addresses the applicant’s basic information:

5. Business name
6. DBA name (if applicable)
7. Type of entity (Corporation, LLC, Partnership, Sole Proprietorship, Other)
8. Date of business formation
9. State of business formation
10. Federal Employer Identification Number (EIN) or Tax Identification Number

It would be best if you also used this section to gather information about the business’ primary location (place of business) and contact information:

11. Office address
12. Business phone number
13. Business email address

Additionally, ask for the following information to get a better idea of how the business operates:

14. Business industry or a description of the business
15. Proposed use of premises
16. Number of years in business
17. Gross annual revenue
18. Other business locations

Step 3 – Write the Name of the Person Signing the Lease/Individual Owner

The person (or persons) who will sign the lease agreement (often the business owner or owners) must provide their personal information on a commercial lease application.

This identifying information helps the landlord conduct any credit and background checks necessary to determine risk and creditworthiness.

The following is what you should ask of each person legally responsible for entering into contracts for the business:

19. Full name
20. Business title
21. Date of birth
22. Social Security number
23. Personal address
24. Personal phone number
25. Personal email address
26. Driver’s license number and state of issue

Step 4 – Identify the Name of the Person Guaranteeing the Lease 

Landlords often ask for guarantors on a commercial lease. This person agrees to fulfill the primary debtholder’s contractual obligations should the debtholder fail to do so.

You may request more than one person to guarantee the lease. For each guarantor, collect the following:

27. Full name
28. Business title (if applicable)
29. Date of birth
30. Social Security number
31. Personal address
32. Personal phone number
33. Personal email address
34. Driver’s license number and state of issue

Step 5 – Collect Bank References

Bank references are bank managers’ written opinions of their customer’s (your applicant’s) financial stability and creditworthiness.

On a business lease application form, gather the information necessary to contact the potential tenant’s banking institution:

35. Bank name
36. Bank contact name and title
37. Bank address
38. Bank phone number
39. Bank email address
40. Account type and number

Request bank references for two accounts, but you can request more or less.

Step 6 – Gather Business and Credit References

Business and credit references are companies or individuals who can vouch for prospective tenants’ business aptitude and ability to make timely lease payments.

When writing your application, request the following business and credit reference information:

41. Name
42. Title (if applicable)
43. Business address
44. Relationship to applicant
45. Phone number
46. Email address

Always ask for at least two credit or business references on your application.

Step 7 – Ask for Personal References

Personal references shed light on your applicant’s character.

Request at least two personal references and gather the following from each:

47. Full name
48. Address
49. Relationship to applicant
50. Phone number
51. Email address

Step 8 – Get Lease History

A commercial lease history is a list of properties the business previously rented . If the applicant owned all prior places of occupancy, ask for addresses of real estate ownership. Also, ask if the business entity is paying rent on commercial real estate.

Ask the applicant to provide the following:

52. Current business address
53. Dates of occupancy for current address
54. Reason for leaving current address
55. Whether the applicant owns or rents at its current location
56. Monthly rent/mortgage payment
57. Landlord/mortgage company and contact name
58. Landlord/mortgage company phone number
59. Landlord/mortgage company email address

Gather the above information for prior addresses for the time you deem appropriate.

Step 9 – Enter Assets and Sources of Income

Your applicant should provide information on assets and income sources for consideration in their application.

Request the following:

60. Business assets and their value
61. Sources of income
62. The amount of money brought in monthly from each income source

Step 10 – Fill in Creditors/Liabilities

A business’s liabilities are losses, ongoing obligations, debt, and continued operating costs.

Creditors are people or companies the applicant owes money to.

Ask for the name of all creditors and the amount due to each applicant listed on the commercial lease application.

Step 11 – Identify Other Information to Collect 

You can write other questions on your lease application to gauge whether or not the applicant will be a good tenant.

Ask if the applicant or any principal, officer, or partner has:

63. Been evicted
64. Breached a lease agreement
65. Been sued for nonpayment of rent
66. Been involved in other litigation
67. Declared bankruptcy

If the applicant replies ‘yes’ to any of the above questions, require an explanation.

Step 12 – Ask for Additional Documents 

68. Landlords use additional documents , including bank statements and financial reports, to verify assets and liabilities and to discern the business’ stability and creditworthiness:

• Business financial statements, profit and loss statements, balance sheet
• Personal financial statements (if applicable)
• Bank account statements
• Tax returns (business and personal if applicable)
• Business plan
• Credit report (business and personal if applicable)

Frequently Asked Questions

How is a Commercial Lease Application Different from a Residential Lease Application?

Unlike residential leases, commercial leases are designed for income-generating activities. The application focuses on business-related aspects such as financials, rental history, and the nature of the commercial enterprise.

Why is Proper Documentation Important in the Commercial Lease Application Process?

Proper documentation is vital for legal compliance and transparency. It helps landlords make informed decisions, communicate effectively with applicants, and protect themselves in case of disputes or legal challenges.

Commercial Lease Application Sample