Texas Commercial Lease: Key Clauses
A Texas commercial lease has no standard state form, so the lease text controls. The clauses with the biggest effect are the rent structure (gross, modified gross or triple net), operating expense and CAM charges, term and renewal options, personal guaranty, assignment and subletting, default and remedies and security. Texas law gives landlords a duty to mitigate damages that cannot be waived, and certain statutory protections for both sides.
Rent structure
| Type | Who pays operating costs |
|---|---|
| Gross | Landlord pays taxes, insurance and maintenance, included in rent |
| Modified gross | Split. Tenant pays some costs or increases above a base year. |
| Triple net (NNN) | Tenant pays rent plus property taxes, insurance and maintenance |
Define exactly what is included in common area maintenance (CAM), how it is allocated and whether there are caps or audit rights.
Term, renewal and rent changes
- Fixed term with start and expiration dates.
- Renewal options: how many, at what rent, and how the tenant exercises them.
- Rent escalations, either fixed steps or tied to an index.
- Holdover rent if the tenant stays past the end.
Guaranty, assignment and default
- Personal guaranty. A landlord may require an owner to guarantee the lease, which can make the owner personally liable. See personal guarantees.
- Assignment and subletting. Whether the landlord's consent is needed and whether it can be unreasonably withheld.
- Default and cure. Notice, cure periods and remedies, including termination and recovery of rent.
- SNDA. A subordination, non-disturbance and attornment agreement protects the tenant if the landlord's lender forecloses.
Texas statutory points
- A commercial landlord has a duty to mitigate damages after a tenant default, and the Property Code says a waiver of that duty is void.
- Texas law gives a commercial landlord a statutory landlord's lien on certain tenant property in the building, subject to conditions such as the lien being in writing in some cases, and it can be waived or subordinated.
- Rules govern lockouts and removal of a tenant's property, so self-help by the landlord is limited.
- Check the Property Code for current notice rules on termination and eviction.
Negotiation and review
Both sides should read the use clause, exclusive use, parking, signage, repairs and casualty clauses. Tenants should negotiate caps on operating cost increases, and landlords should keep clear default remedies and adequate security. A lease is long and hard to change, so legal review before signing is much cheaper than a dispute afterward. See also residential lease rules for comparison.
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Book Free ConsultationFrequently asked questions
Is there a standard Texas commercial lease form?
No state-promulgated form is required, so landlords and tenants use their own or industry forms. TREC forms apply to residential transactions.
Can a landlord lock out a commercial tenant?
Texas regulates lockouts. A landlord must follow the Property Code procedure and lease terms, so check before taking any self-help step.
Does a landlord have to try to re-let the space after a default?
Yes. Texas imposes a duty to mitigate that cannot be waived in the lease.
What is a CAM charge?
Common area maintenance charges are the tenant's share of the costs of maintaining shared areas, as defined by the lease.