SOUTH CAROLINA COMMERCIAL LEASE AGREEMENT

(Triple‐Net (NNN) Form – Comprehensive Version)

[// GUIDANCE: This template is drafted for a true triple-net commercial lease in South Carolina (“SC”). Delete or modify any provisions inconsistent with the parties’ deal (e.g., convert to gross or modified-gross by adjusting §§ 5–7 and related expense pass-through provisions).]

TABLE OF CONTENTS

1. Document Header & Recitals
2. Definitions
3. Demise, Term & Possession
4. Rent; Additional Rent; Late Charges
5. Taxes, Insurance & Operating Expenses
6. Use of Premises; Environmental Compliance
7. Maintenance, Repairs & Alterations
8. Assignment, Subletting & Transfer Restrictions
9. Landlord’s Representations & Warranties
10. Tenant’s Representations & Warranties
11. Covenants of Tenant
12. Events of Default & Remedies
13. Risk Allocation
14. Dispute Resolution
15. General Provisions
16. Execution Block

1. DOCUMENT HEADER & RECITALS

COMMERCIAL LEASE AGREEMENT (“Lease”) made as of [EFFECTIVE DATE] (“Effective Date”) by and between [LANDLORD LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE], having an address at [LANDLORD ADDRESS] (“Landlord”), and [TENANT LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE], having an address at [TENANT ADDRESS] (“Tenant”). Landlord and Tenant are sometimes referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

A. Landlord is the fee simple owner of certain real property commonly known as [PROPERTY NAME / ADDRESS], located in [COUNTY] County, South Carolina (the “Real Property”).
B. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, a portion of the Real Property described in Exhibit A (the “Premises”), upon the terms and conditions set forth herein.
C. The Parties enter into this Lease for good and valuable consideration, the receipt and sufficiency of which are acknowledged.

2. DEFINITIONS

For ease of reference, the following capitalized terms have the meanings set forth below. Any term not defined herein shall have the meaning given in the applicable section of the Lease.

“Additional Rent” – All monies other than Base Rent payable by Tenant pursuant to this Lease, including Taxes (§ 5.1), Insurance Costs (§ 5.2), Operating Expenses (§ 5.3), late fees (§ 4.3), indemnity payments (§ 13.1), and any other reimbursable amounts.

“Base Rent” – The annual rental amount set forth in Schedule 1, payable in equal monthly installments.

“Business Days” – Any day other than Saturday, Sunday, or a legal holiday in the State of South Carolina.

“Commencement Date” – The date specified in Schedule 1 upon which the Term begins.

“Environmental Laws” – All applicable federal, state, and local statutes, regulations and ordinances relating to the protection of human health or the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; and S.C. Code Ann. Title 44, Chap. 56.

“Event of Default” – Any event described in § 12.1 giving rise to Landlord’s remedies.

“Force Majeure” – Any cause beyond the reasonable control of a Party, as further defined in § 13.4.

“Hazardous Materials” – Any substance regulated pursuant to Environmental Laws.

“Lease Year” – Each consecutive twelve-month period beginning on the Commencement Date (or anniversary thereof).

“Operating Expenses” – Defined in § 5.3.

“Permitted Use” – The use described in Schedule 1, subject to § 6.

“Term” – The period commencing on the Commencement Date and expiring on the Expiration Date, as defined in § 3.1, unless sooner terminated pursuant to this Lease.

[// GUIDANCE: Add or delete definitions as needed. Maintain alphabetical order.]

3. DEMISE, TERM & POSSESSION

3.1 Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, together with non-exclusive rights to use Common Areas appurtenant thereto, subject to the terms herein.

3.2 Term. The Term shall commence on the Commencement Date and expire at 11:59 p.m. on [EXPIRATION DATE], unless earlier terminated or extended in accordance with this Lease.

3.3 Delivery & Acceptance. Landlord shall deliver the Premises in “broom-clean” condition, free of Landlord’s personal property, and in compliance with applicable Laws. Tenant’s possession of the Premises shall constitute conclusive evidence of acceptance, “AS IS,” except for latent defects timely noticed in writing within thirty (30) days after possession.

3.4 Renewal Options. Tenant shall have [NUMBER] option(s) to renew the Term for successive periods of [OPTION LENGTH] each, exercisable upon at least [NOTICE PERIOD] days’ prior written notice, on the same terms except Base Rent shall be adjusted pursuant to Schedule 1.

4. RENT; ADDITIONAL RENT; LATE CHARGES

4.1 Base Rent. Tenant shall pay Base Rent in advance on the first Business Day of each calendar month, without offset, in lawful U.S. funds to [PAYMENT ADDRESS OR ACCOUNT] or as Landlord otherwise directs.

4.2 Additional Rent. Additional Rent shall be estimated and billed monthly with annual reconciliations per § 5.4. All Additional Rent shall be due within ten (10) Business Days after Landlord’s invoice.

4.3 Late Charges & Interest. Any Rent not received within five (5) Business Days after due shall bear interest at the lesser of (i) ten percent (10%) per annum or (ii) the highest rate permitted under S.C. Code Ann. § 34-31-20 (2023). In addition, Tenant shall pay a late charge equal to five percent (5%) of the overdue amount.

4.4 Net Lease. This Lease is intended to be absolutely net to Landlord, and Tenant shall pay all costs and expenses relating to the Premises except as expressly stated otherwise.

5. TAXES, INSURANCE & OPERATING EXPENSES

5.1 Taxes. Tenant shall pay all real estate taxes, assessments, and similar governmental charges (“Taxes”) levied against the Premises for any period during the Term. Taxes shall be prorated for partial Lease Years.

5.2 Insurance.
a. Tenant shall maintain throughout the Term:
i. Commercial general liability insurance with limits not less than $[AMOUNT] per occurrence and $[AMOUNT] aggregate;
ii. Property insurance (special form) covering Tenant’s property and improvements at full replacement cost;
iii. Workers’ compensation as required by law.
b. Landlord shall maintain property insurance on the Building shell only. Tenant shall reimburse Landlord for the allocable premium as Additional Rent.
c. All policies shall name Landlord, any mortgagee, and their respective designees as additional insureds or loss payees, as applicable, provide primary, non-contributory coverage, and contain waivers of subrogation.

5.3 Operating Expenses. “Operating Expenses” means all commercially reasonable costs of owning, operating, maintaining, repairing, and replacing the Real Property and common facilities, including without limitation utilities serving Common Areas, management fees (not to exceed three percent (3%) of gross revenues), maintenance contracts, and capital expenditures amortized over their useful life.

5.4 Annual Reconciliation. Within 120 days after the end of each Lease Year, Landlord shall provide a statement of actual Taxes, Insurance Costs, and Operating Expenses. Overpayments shall be credited against the next installment(s) of Rent; underpayments shall be paid by Tenant within thirty (30) days.

6. USE OF PREMISES; ENVIRONMENTAL COMPLIANCE

6.1 Permitted Use. Tenant shall use the Premises solely for [PERMITTED USE] and for no other purpose without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed.

6.2 Compliance with Laws. Tenant, at its sole cost, shall comply with all applicable federal, state, and local laws, ordinances, regulations, and orders (collectively, “Laws”) relating to (i) Tenant’s use and occupancy of the Premises; (ii) occupational safety; and (iii) the storage, handling, or disposal of Hazardous Materials.

6.3 Hazardous Materials. Tenant shall not cause or permit the Release of any Hazardous Materials on, under, or about the Premises except in quantities and manners permitted by Environmental Laws. Tenant shall promptly remediate any Release caused by Tenant in accordance with Environmental Laws, and shall indemnify Landlord pursuant to § 13.1.

6.4 Environmental Audits. Landlord may conduct, at its expense (or at Tenant’s expense upon an Event of Default or reasonable suspicion of non-compliance), environmental inspections of the Premises not more than once per Lease Year. Tenant shall cooperate fully.

6.5 Survival. Tenant’s obligations under this § 6 shall survive expiration or earlier termination of the Lease.

7. MAINTENANCE, REPAIRS & ALTERATIONS

7.1 Tenant’s Obligations. Tenant shall, at its sole expense, maintain the Premises, including all interior, non-structural components, HVAC, plumbing, and electrical systems exclusively serving the Premises, in good order and repair, and in a clean and safe condition.

7.2 Landlord’s Obligations. Landlord shall maintain the structural components of the Building, including foundations, roof, and exterior walls, except to the extent damage is caused by Tenant, its agents, employees, or invitees. Tenant shall reimburse Landlord for any such Tenant-caused damage.

7.3 Alterations. Tenant shall not make any alterations, improvements, or additions (“Alterations”) without Landlord’s prior written consent, which shall not be unreasonably withheld. Tenant must provide plans, permits, and evidence of insurance prior to commencement. All Alterations shall be performed lien-free, in accordance with Laws, and become Landlord’s property upon installation unless designated as Tenant’s trade fixtures. Landlord may require removal and restoration at Tenant’s expense upon Lease termination.

7.4 Mechanics’ Liens. Tenant shall keep the Real Property free from any liens arising from work performed, materials furnished, or obligations incurred by or on behalf of Tenant. If a lien is filed, Tenant shall bond or discharge same within ten (10) Business Days.

8. ASSIGNMENT, SUBLETTING & TRANSFER RESTRICTIONS

8.1 General Prohibition. Tenant shall not assign this Lease, sublet the Premises, license space, or otherwise transfer any interest herein (each, a “Transfer”) without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, subject to the requirements of this § 8.

8.2 Transfer Procedure. Tenant’s written request for consent shall include (i) the proposed transferee’s legal name, address, and entity information; (ii) financial statements for the prior two fiscal years; (iii) proposed use; and (iv) copy of the proposed Transfer instrument. Landlord shall approve or disapprove within twenty (20) Business Days after receipt of all required information.

8.3 Conditions to Consent. As conditions precedent to any Transfer:
a. No Event of Default shall exist;
b. The transferee shall execute a commercially reasonable assumption agreement;
c. Tenant shall reimburse Landlord for reasonable legal fees (not to exceed $[CAP AMOUNT]) incurred in connection with the Transfer.

8.4 Permitted Transfers. Notwithstanding § 8.1, Tenant may, without Landlord’s consent but upon prior written notice, Transfer (i) to an Affiliate controlling, controlled by, or under common control with Tenant, (ii) in connection with a merger, consolidation, or sale of substantially all of Tenant’s assets, provided the successor has a net worth at least equal to Tenant’s as of the Effective Date.

8.5 Continuing Liability. No Transfer shall release Tenant from its obligations hereunder unless expressly agreed in writing by Landlord. Liability shall be joint and several.

8.6 Recapture Right. [OPTIONAL – DELETE IF NOT DESIRED] Landlord may, upon Tenant’s Transfer request, elect to recapture the Premises by terminating this Lease as of the proposed effective date of such Transfer, except for Transfers under § 8.4.

[// GUIDANCE: South Carolina imposes no statutory restriction on commercial assignments/subleases beyond common-law reasonableness. This clause conforms to best practices.]

9. LANDLORD’S REPRESENTATIONS & WARRANTIES

Landlord represents and warrants, as of the Effective Date:
9.1 Authority. Landlord is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute and perform this Lease.
9.2 Title. Landlord holds good and marketable fee title to the Real Property, free and clear of all liens and encumbrances except those of record.
9.3 Hazardous Materials. To Landlord’s actual knowledge, without duty of investigation, no Release of Hazardous Materials exists on the Premises in violation of Environmental Laws.
9.4 Litigation. There is no pending litigation or condemnation proceeding materially affecting the Premises that has not been disclosed in writing to Tenant.

[// GUIDANCE: Insert any site-specific disclosures in a Disclosure Schedule.]

10. TENANT’S REPRESENTATIONS & WARRANTIES

Tenant represents and warrants, as of the Effective Date and continuing throughout the Term:
10.1 Authority. Tenant is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to enter into and perform this Lease.
10.2 Compliance. Tenant’s intended use of the Premises is lawful and will not violate any exclusive right granted to another tenant at the Real Property.
10.3 Hazardous Materials. Tenant shall not introduce Hazardous Materials except in compliance with Environmental Laws and this Lease.
10.4 OFAC. Tenant is not, and shall not become, a person or entity with whom U.S. persons are prohibited from doing business under U.S. sanctions laws.

11. COVENANTS OF TENANT

11.1 Continuous Operation. Tenant shall continuously operate its business in the Premises during normal business hours, except during Force Majeure or approved closure for Alterations.

11.2 Signs. Tenant shall not install exterior signs without Landlord’s prior written approval, not to be unreasonably withheld. All signage must comply with applicable ordinances and the Building’s sign criteria.

11.3 Access. Landlord and its agents may enter the Premises upon at least twenty-four (24) hours’ prior notice (except in emergencies) to inspect, make repairs, show to prospective purchasers or lenders, or perform other lawful acts.

11.4 Estoppel Certificate. Within ten (10) Business Days after request, Tenant shall execute and deliver an estoppel certificate certifying such matters as reasonably requested by Landlord or its mortgagee.

12. EVENTS OF DEFAULT & REMEDIES

12.1 Events of Default. Each of the following constitutes an Event of Default:
a. Failure to pay any Rent when due, and such failure continues for five (5) Business Days after written notice;
b. Violation of any non-monetary covenant not cured within thirty (30) days after notice (or such longer period as necessary provided Tenant commences cure within such period and diligently prosecutes to completion);
c. Tenant’s abandonment or vacatur of the Premises;
d. Filing of bankruptcy or insolvency proceedings by or against Tenant not dismissed within sixty (60) days;
e. Assignment or Transfer in violation of § 8.

12.2 Remedies. Upon an Event of Default, Landlord may, subject to S.C. Code Ann. §§ 27-37-10 et seq.:
a. Accelerate all Rent due for the remainder of the Term, discounted at three percent (3%) per annum;
b. Terminate Tenant’s right of possession and re-enter the Premises, without terminating the Lease, pursuant to summary ejectment under S.C. Code Ann. § 27-37-40 (2023);
c. Terminate this Lease and recover damages;
d. Seek injunctive relief, specific performance, or any other equitable remedy;
e. Exercise self-help to perform Tenant’s obligations and charge Tenant the cost thereof as Additional Rent.

12.3 Mitigation. Landlord shall use commercially reasonable efforts to relet the Premises and credit net rental proceeds against Tenant’s liability.

12.4 Attorneys’ Fees. The prevailing Party in any action arising under this Lease shall be entitled to reasonable attorneys’ fees, court costs, and expenses.

13. RISK ALLOCATION

13.1 Indemnification by Tenant. Tenant shall indemnify, defend, and hold harmless Landlord and its directors, officers, employees, agents, and mortgagees (“Indemnitees”) from and against any and all claims, liabilities, damages, or expenses (including reasonable attorneys’ fees) arising out of (i) Tenant’s use or occupancy of the Premises, (ii) any negligent or wrongful act or omission of Tenant or its agents, contractors, employees, or invitees, or (iii) breach of this Lease. The foregoing shall survive termination of the Lease.

13.2 Indemnification by Landlord. Landlord shall indemnify Tenant from and against losses arising from Landlord’s gross negligence or willful misconduct.

13.3 Limitation of Liability. [NEGOTIABLE — INSERT AS AGREED] Notwithstanding anything to the contrary, neither Party shall be liable for any consequential, special, or punitive damages, except for matters covered under §§ 6 (Environmental) and 13.1 (Indemnity). Landlord’s aggregate liability shall not exceed the lesser of (i) an amount equal to twelve (12) months’ Base Rent or (ii) the equity interest of Landlord in the Real Property.

13.4 Force Majeure. Neither Party shall be liable for failure to perform obligations (other than monetary) due to Force Majeure events, provided such Party gives written notice within five (5) Business Days after the event and resumes performance promptly after cessation.

14. DISPUTE RESOLUTION

14.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of South Carolina, without regard to conflict-of-laws principles.

14.2 Forum Selection. Any suit, action, or proceeding arising out of or relating to this Lease shall be instituted exclusively in the courts of competent jurisdiction located in [COUNTY] County, South Carolina, and each Party irrevocably submits to such jurisdiction.

14.3 Optional Arbitration. [CHECK ONE]
☐ Arbitration Elected
☐ Arbitration Not Elected

If elected, any dispute shall be finally resolved by arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, held in [CITY, SC], before one neutral arbitrator. Judgment on the award may be entered in any court having jurisdiction.

14.4 Jury Trial Waiver. [OPTIONAL] TO THE EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION RELATING TO THIS LEASE.

14.5 Injunctive Relief. Nothing herein shall limit Landlord’s right to seek immediate injunctive relief, including eviction as provided in § 12.

15. GENERAL PROVISIONS

15.1 Amendment & Waiver. No amendment or waiver shall be effective unless in writing and signed by authorized representatives of both Parties. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.

15.2 Notices. All notices shall be in writing and deemed given when (i) delivered in person, (ii) sent by nationally recognized overnight courier, or (iii) deposited in the U.S. Mail, certified, return receipt requested, postage prepaid, addressed to the Parties at the addresses first written above (or such other address as a Party may designate by notice).

15.3 Successors & Assigns. This Lease shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

15.4 Severability. If any provision is held invalid, the remainder of this Lease shall remain in full force, provided the essential purposes are not thereby frustrated.

15.5 Integration. This Lease, together with the exhibits and schedules hereto, constitutes the entire agreement between the Parties and supersedes all prior or contemporaneous understandings.

15.6 Counterparts; E-Signatures. This Lease may be executed in counterparts, each deemed an original, and together constituting one instrument. Signatures delivered electronically (e.g., via DocuSign or PDF) shall be deemed originals.

15.7 Recording. Tenant shall not record this Lease. At Landlord’s request, the Parties shall execute a short-form memorandum suitable for recording. Recording costs shall be borne by Tenant.

15.8 Confidentiality. Tenant shall keep the terms of this Lease confidential, except as required by law or to its lenders, investors, advisors, or as otherwise approved by Landlord.

16. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Lease as of the Effective Date written above.

LANDLORD:

[LANDLORD LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ________

TENANT:

[TENANT LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: ________

NOTARIZATION (if required)

STATE OF _ )
COUNTY OF ______ )

The foregoing instrument was acknowledged before me this ___ day of _, 20_, by ____ as _____ of [LANDLORD LEGAL NAME].

Notary Public
My commission expires: _____

[Duplicate notary block for Tenant, if required under SC practice.]

EXHIBITS & SCHEDULES (Attach as Needed)

• Exhibit A – Legal Description / Floor Plan of Premises
• Schedule 1 – Economic Terms (Base Rent Table, Commencement/Expiration Dates, Security Deposit, Renewal Options)
• Exhibit B – Rules & Regulations
• Exhibit C – Form of Estoppel Certificate
• [Add Environmental Disclosure, if any]

[// GUIDANCE:
1. Verify compliance with any local zoning or building restrictions affecting the Permitted Use.
2. Confirm insurance minimums align with risk profile and lender requirements.
3. South Carolina does not have a statutory commercial landlord-tenant act; default remedies derive from common law and Title 27 (most notably Ch. 37 – Ejectment of Tenants). Citations herein (e.g., S.C. Code Ann. § 27-37-40) cover well-established summary ejectment procedures.
4. Consider adding guaranty provisions if Tenant’s credit is insufficient.
5. For multi-tenant properties, coordinate expense definitions with existing leases to avoid allocation conflicts.
6. If the Premises include wetlands or coastal zones, consult SC Department of Health & Environmental Control (DHEC) regulations for additional environmental compliance obligations.]