Connecticut Commercial Lease Agreement

Implied Covenant of Good Faith and Fair Dealing  

• An implied covenant requires parties to implement the agreement as intended, not undercutting its purpose.
• To prove breach, one must show conduct designed to mislead, deceive, neglect, or refuse to fulfill a duty not prompted by honest mistake.

Statutory Notice Periods

• If the tenant defaults on rent payments, the landlord must provide written notice and allow the tenant 15 days to cure the default before taking further action.
• For other defaults of the lease covenants and conditions, the landlord must provide written notice and allow the tenant 30 days after receipt of notice to commence curing the default before declaring the lease terminated.

Security Deposits

• Connecticut law doesn’t limit the amount a landlord may collect as a security deposit for a commercial lease. 
• There are no Connecticut statutes regulating the return of commercial security deposits. The landlord and tenant should include provisions in the lease agreement governing the return of the deposit.
• State law doesn’t prohibit the landlord from mixing commercial security deposits with other funds they collect. 
• Commercial landlords in Connecticut aren’t required to hold security deposits in an interest-bearing account or pay interest earned to the tenant.

Disclosures

• Permitted use of premises: The permitted use of the premises is restricted to the scope described in the lease agreement. The tenant must obtain the landlord’s written consent to operate outside the permitted use or make substantial changes in business operations.
• Food services disclosure: If a tenant serves food, they must comply with all Connecticut food handling laws and regulations. Violations may breach the lease.
• Tenant improvement disclosure: The lease may allow a build-out period for the tenant to make initial improvements to customize the space before opening. The permitted length of time and any extensions for the build-out period should be specified in the agreement.
• Lead-based paint disclosure: For properties built before 1978, the landlord must provide a lead paint disclosure that states the historical usage of lead-based paint on the property and must provide information on its potential dangers.

Termination and Renewal

• In Connecticut, any lease term exceeding one (1) year must be in writing, properly executed, and recorded to be enforceable against parties other than the landlord and tenant. 
• Leases with renewal or purchase option terms are only binding between the landlord and tenant. 
• To be enforceable against others, a summary notice of lease must be recorded containing names and addresses of the parties, lease start and end dates, property description, renewal/extension and purchase option details, and where the full lease document can be found.
• Either party may terminate this lease at the end of the term by giving proper 90-day notice as specified herein.
• Any lease renewal must be in a written agreement with the same formalities as the original lease.