Last updated February 21, 2023
Commercial Lease Agreements in Texas
With somewhat lax tenancy laws, landlords often consider Texas to be a friendly state for renting commercial property.
In fact, much of the governing authority over a commercial tenancy will come from its Lease Agreement. For example, if the parties argue over interrupted utilities or a tenant getting locked out, the lease takes precedence over the law.
That being said, Commercial Lease Agreements are open to negotiation. Commercial tenants should review their contracts and advocate for terms that suit their business. In the end, a fair contract benefits both parties: the landlord helps secure a respectful tenant, while the tenant gets a place to run their business.
LawDepot’s template contains all the information you’ll need to create a standard Commercial Lease Agreement in Texas. You can further customize the document by adding, deleting, or editing terms as needed.
What are commercial property rights in Texas?
Generally, commercial tenancies in Texas must comply with certain chapters of the Texas Property Code, including Chapter 93 (Commercial Tenancies). Some county or city ordinances may also apply.
Here’s a brief summary of the landlord/tenant rights and obligations that the code outlines for commercial properties:
1. Preventing access to the property
| Landlord |
Tenant |
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Right: Landlord may prevent a tenant from entering the property (i.e., lock them out) without following judicial processes in certain situations (e.g., unpaid rent).
Requirement: If changing a lock because of a tenant’s unpaid rent, the landlord must place a notice with instructions for obtaining a new key. This notice must contain certain details, as well as meet other legal requirements for delivery.
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Right: If the landlord locked a tenant out because of unpaid rent and fails to give the proper legal notice, the tenant may have access to legal remedies (e.g., reclaiming costs or possession of the property).
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2. Acceptable uses/controls of the property
| Landlord |
Tenant |
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Right: Landlord may presume a tenant has abandoned the premises if they remove a substantial amount of their property. In this case, the landlord may seize any remaining unclaimed property.
Requirement: The landlord must contact the tenant about claiming the property and give them 60 days to do so before disposing of it.
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Right: Landlord cannot interrupt utility services that a tenant pays for—unless it’s for legitimate reasons (e.g., emergency).
Right: Landlord cannot remove certain fixtures from the property (e.g., door or window mechanisms) unless it’s for repair. If so, it must be done promptly.
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3. Security deposits
| Landlord |
Tenant |
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Right: Landlord may retain a security deposit and deduct from it to cover charges that the tenant is liable for (e.g., unpaid rent or property damage beyond normal wear and tear.)
Requirement: The landlord must give any refundable amounts from the deposit to the tenant within 60 days of the end of the lease. They must record any deductions on an itemized receipt for the tenant (unless the tenant owes rent or there’s no dispute over the amount of rent owed).
Requirement: The landlord must keep accurate records of all security deposits. They must also delegate the responsibility of the deposit if they cease to be the property owner (e.g., through sale, assignment, etc.).
Requirement: Wrongfully withholding the security deposit will result in legal consequences (e.g., paying the tenant’s legal fees, forfeiting the right to keep any portion of the deposit, etc.).
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Right: The tenant’s claim to their security deposit takes priority over the claim of any creditor or bankrupt trustee that may target the landlord.
Requirement: To enforce the right to the return of their security deposit, the tenant must provide a forwarding address to the landlord. (Failing to do so doesn’t mean the tenant forfeits this right, but the landlord isn’t obligated to reach out first.)
Requirement: The tenant cannot withhold last month’s rent with the idea that their security deposit will cover it. If they do, they’re liable to pay three times the rent owed.
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4. Charges and rights to terminate
| Landlord |
Tenant |
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Right: The landlord may terminate the tenancy early if the tenant uses the premises (and is convicted) for public indecency or prostitution. In this case, they don’t need to give any notice other than the notice to vacate, which must give at least three days' notice.
Right: The landlord may terminate the tenancy early for unpaid rent. In this case, the Lease Agreement should address (or waive) the notice period for termination.
Requirement: Landlord must give appropriate notice to end the tenancy for reasons unrelated to those outlined in the Texas Property Code.
Right: The landlord may charge the tenant for expenses other than rent or property damage only if the charge is included in the Lease Agreement (or in a Lease Amendment).
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Right: The tenant may terminate the lease early if the landlord (or their agent) violates certain sections of the Texas Property Code. The right to terminate may also be covered in the Lease Agreement.
Requirement: Tenant must give appropriate notice to end the tenancy legally (although there may be some other legal reasons to break the lease.)
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What should a Commercial Lease in Texas include?
LawDepot’s Commercial Lease template prompts you to include the details needed for a standard contract.
To create your custom document, be prepared to address the following information:
- Property and party details, including names and addresses
- General lease terms, such as the length and type of lease
- Rent terms, such as payment frequency and rent increases
- Security deposit and other expenses (e.g., utilities or insurance)
- Terms unique to the business tenant
In addition to these general terms, the landlord might also address whether or not the tenant can assign or sublease the property. Otherwise, Texas law prohibits a tenant from subletting or assigning the property without the landlord’s permission.
It’s also important to include any terms on the frequency or amount of rent increases in the Lease Agreement. Without rent control laws, commercial landlords in Texas are typically free to increase the rent as they see fit. That being said, commercial tenants are also free to negotiate rent terms.
Finally, consider any other unique terms that might apply to the contract—like requiring an inspection or offering a signing bonus.
Do commercial leases need to be notarized in Texas?
No, Texas law does not require you to notarize your Commercial Lease Agreement for it to be valid. Generally, a valid contract must meet certain legal requirements (such as mutual consent to enter the agreement).
Still, notarizing your document helps to authenticate each party’s signature.
