New Jersey Commercial Lease Agreement

Leases for more than 3 years must be in writing and recorded under NJ's Statute of Frauds (NJSA 25:1-11). Even shorter commercial leases should be in writing to define the parties' rights. Oral commercial leases are legally valid but extremely risky and difficult to enforce.

Northern New Jersey (Essex, Bergen, Hudson counties) commercial leases often mirror New York City practices — 5–10 year terms with TI allowances of $40–$100/sq ft for office build-outs. Southern NJ and suburban markets have shorter terms (3–5 years) and lower TI. Retail leases include percentage rent for high-traffic areas.

Commercial tenants in New Jersey may be responsible for their proportionate share of real property taxes under an NNN lease. NJ has some of the highest property tax rates in the country. Tax base years and cap provisions should be negotiated into longer leases to protect tenants from sudden tax increases.

Only if the lease permits. Most NJ commercial leases require written landlord consent for subleasing. Unlike residential leases, commercial landlords have broad discretion to approve or reject subtenants, subject only to any 'reasonableness' standard in the lease. Negotiate sublease rights at the outset.