Free Delaware Commercial Lease Agreement Template

A Delaware commercial lease agreement rents out a commercial unit — which 25 Del. C. § 6102(1) defines as any lot, structure, or portion of one occupied or rented for commercial or industrial purposes — to a tenant running a business there.

Delaware separates this from residential renting deliberately. Chapter 61 of Title 25 is headed Commercial Leases and sits outside the Residential Landlord-Tenant Code entirely, with its own short set of rules.

Chapter 61 is brief, but each section bites.

A Clause Delaware Will Not Enforce

25 Del. C. § 6104 makes a provision of a written rental agreement authorizing anyone other than the tenant to confess judgment against the tenant void and unenforceable. Confession-of-judgment clauses appear in commercial lease templates drawn for other states, so it is worth checking any form document before signing it here.

Charging the Tenant for Utilities

Under § 6101, a landlord who buys utility service from a public utility and redistributes it to a commercial unit may charge the tenant for it, by way of rent or otherwise, only up to what the public utility would have billed that tenant on a direct meter. The section conditions this on the landlord continuously metering both the tenant’s unit and the common area.

Taxes Paid by the Tenant

Section 6105 treats any lawful tax on the property that the tenant pays or has levied from them as a setoff against rent or other demand from the owner. Where there is not enough rent to cover it, the tenant may demand and recover the difference from the owner, with costs. The section leaves any contrary contract between the parties intact.

The landlord brings a summary possession action, and 25 Del. C. § 5702 lists the grounds on which a Delaware commercial lease agreement can end that way. Unless the written rental agreement says otherwise, the action lies where the tenant unlawfully continues in possession after the agreement expires without permission, has wrongfully failed to pay the agreed rent, has wrongfully deducted money from it, or has breached a lawful obligation.

Chapter 57 states that for its purposes, rental agreement includes a lease for a commercial rental unit. The case goes to the Justice of the Peace Court hearing civil cases in the county where the commercial unit sits.

Delaware also lets the parties run two cases at once. Where summary possession is sought on a commercial lease, the parties may split or bifurcate the cause of action, bringing the possession claim in one court and a plenary action between the same parties over the same lease in another. Any such plenary action has to be commenced within six months of final judgment in the summary possession case.

1. Agree the business terms: rent and increases, the term, renewal rights, and who carries insurance and repairs.
2. Strike any confession-of-judgment clause, since § 6104 makes it unenforceable and leaving it in misleads both sides.
3. Set out the utility arrangement plainly, including whether the unit and common area are separately metered.
4. State who bears property taxes, remembering that a tenant who pays them gets a setoff under § 6105 unless the lease says otherwise.
5. Sign, then give each side a copy and keep yours with your business records.

Chapter 61 leaves most terms open, so a Delaware commercial lease agreement has to spell out the rest:

• Legal names of landlord and tenant, and the entity behind each signature.
• A description of the commercial unit, including any common areas the tenant may use.
• Rent, the due date, and how it changes across the term.
• Term, renewal rights, and what happens if the tenant stays on.
• The utility metering and recharge arrangement.
• Which side pays property taxes, insurance, and each class of repair.
• Permitted use, assignment and subletting, and the cure period for a default.