AI Lease Agreement Generator

The three main types are: Gross Lease (landlord pays all operating expenses, tenant pays flat rent), Net Lease (tenant pays base rent plus some operating expenses — single net, double net, or triple net), and Modified Gross Lease (expenses are shared between landlord and tenant). Triple net (NNN) leases are the most common for commercial properties, where tenants pay rent plus property taxes, insurance, and maintenance costs.

A lease is a fixed-term agreement (typically 1+ years) that locks in terms for the entire period, while a rental agreement is typically month-to-month and can be modified with proper notice. Leases provide more stability and predictability for both parties but less flexibility. Rental agreements offer flexibility but less certainty about long-term occupancy and costs. The choice depends on the parties' needs for stability versus flexibility.

Security deposit rules vary significantly by jurisdiction. Key considerations include maximum deposit amounts (many states cap at 1-2 months' rent for residential), permitted deductions (unpaid rent, damages beyond normal wear), required separate accounts, interest payment obligations, return timeframes (typically 14-30 days after lease end), and itemized deduction statements. Commercial leases have fewer restrictions but should still clearly address deposit handling.

Landlords can typically terminate early only for cause, such as non-payment of rent, material lease violations, illegal activities, or property damage. The lease should specify notice requirements and cure periods for defaults. Some leases include early termination clauses allowing either party to terminate with proper notice and potentially a termination fee. Without such provisions, early termination may constitute breach of contract.

A personal guarantee means an individual (typically the business owner) personally guarantees the tenant's lease obligations. If the business fails to pay rent or breaches the lease, the guarantor is personally liable for the remaining obligations. This is common when the tenant is a new business or LLC with limited assets. Tenants may negotiate limited guarantees that cap exposure or burn off after a period of timely payments.