Use our lease application to screen tenants before renting your commercial property.
Updated June 25, 2024
Written by Sara Hostelley | Reviewed by Susan Chai, Esq.
A commercial lease application is a document a landlord or property manager uses to screen applicants for a commercial rental property. It’s the first step in leasing a commercial property, and it can lead to a commercial lease agreement where the business tenant uses the property for income-generating activities under the landlord’s specific terms.
Commercial rental applications focus on businesses’ suitability to rent a commercial space. In contrast, residential lease applications focus on individuals’ aptness to rent an apartment or private home.
A commercial lease application helps the landlord or property manager screen businesses to evaluate and decide on a tenant for a commercial space. Applications for commercial leases also give insight into a business’s financials and rental history, which helps the landlord choose a suitable tenant and minimize risk.
A landlord usually asks a business entity’s representative or owner to fill out a commercial rental application form to lease commercial space before signing a commercial lease agreement.
Commercial landlords use commercial lease applications to rent out space for business purposes. These landlords can be companies or individuals owning commercial properties such as the following:
The application is an effective screening tool that helps commercial landlords choose qualified tenants with a good business track record, are financially stable, and will use the property responsibly.
As a landlord or property manager, there are limitations to what you can ask while screening commercial tenants. Reduce potential legal issues by limiting your inquiries to the following:
Acquire the completed rental application from the potential tenant. Ensure they provide all the requested details. Review their information to determine if they’d be a suitable candidate depending on their needs and the space you have available.
Proceed with the subsequent steps to verify the information the tenant provides.
All 50 states have a specific office, like a Secretary of State, with reputable businesses on file. Ensure your applicant’s business is in good standing with the state.
The resources below help verify a business’s status with its respective Secretary of State or equivalent office:
| Alabama | Alaska | Arizona |
| Arkansas | California | Colorado |
| Connecticut | Delaware | District of Columbia |
| Florida | Georgia | Hawaii |
| Idaho | Illinois | Indiana |
| Iowa | Kansas | Kentucky |
| Louisiana | Maine | Maryland |
| Massachusetts | Michigan | Minnesota |
| Mississippi | Missouri | Montana |
| Nebraska | Nevada | New Hampshire |
| New Jersey | New Mexico | New York |
| North Carolina | North Dakota | Ohio |
| Oklahoma | Oregon | Pennsylvania |
| Rhode Island | South Carolina | South Dakota |
| Tennessee | Texas | Utah |
| Vermont | Virginia | Washington |
| West Virginia | Wisconsin | Wyoming |
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Look up the business’s credit score, which is a risk and creditworthiness score a third-party company assigns to a business owner or principal.
Dun & Bradstreet is one of the most popular providers of business credit scores. The company created its own proprietary scoring system known as PAYDEX, which measures a business based on its past performance. The scoring system is as follows:
Dun & Bradstreet is relatively affordable, as a report costs $61.99. Other providers of business credit scores include the following companies:
While it’s important to run a business credit check to better understand the company’s financials, you can also benefit from conducting a personal credit check of the business owner. Personal credit checks produce scores between 300 and 850. Ideally, you should consider tenants with a personal credit score of at least 700.
Obtain a personal credit score from one of the three major credit reporting bureaus: Transunion, Experian, or Equifax.
Please ensure you have the business owner’s permission and follow all procedures and regulations of the Fair Credit Reporting Act and the credit reporting agencies.
As the landlord, you can verify the information a potential tenant provides by contacting the references they give. Consider contacting them by phone instead of via email for added legitimacy.
If you have to contact a bank to verify financial information, the bank may request the applicant’s consent before it provides sensitive financial information.
Confirm that the tenant will pay the lease regardless of whether their business succeeds by requiring them to provide a personal guarantee. This statement affirms that the tenant will keep paying the lease until the agreed-upon termination date, even if the business’s operations can no longer persist.
Use the information from the previous steps to select a final tenant who is likely to pay rent on time for the entire lease and adhere to the other lease terms. Notify the tenant with a rental application approval letter. Then, you can start negotiating a lease with your tenant. Have the tenant complete a commercial real estate non-disclosure agreement if you share sensitive information about the property with them.
Send a rejection letter with the reasons for the denial to all applicants you decline. You must also tell the tenant if you take an adverse action due to the applicant’s credit check [1] . Examples of adverse action include declining the applicant, requesting a higher deposit amount, raising the rent amount, and adding a deposit that isn’t required for other applicants.
Be aware of the following warning signs when reviewing a commercial lease application:
Download a commercial lease application form in PDF or Word Format below:
