Tuesday 17 March 2015

How business owners' rights are controlled by restrictions in a commercial lease?


For the most part, commercial leases are different from residential leases. For starters, commercial leases are frequently drawn up for a longer period than residential leases. The length of the lease might be a three, 10 or even 99 year term agreement depending on the tenant situation and the landlord.


Business tenants frequently encounter more operating costs and expenses than residential tenants. Additionally, there are usually more restrictions covering the manner in which the premises can be used including whether any portion of the space may be sublet. If a sublet is something that might be of interest at some point in the future, business owners usually have to approach the landlord for this type of amendment prior to signing the initial lease.


As a general rule, whether it's a sublet clause or other changes, it's not a wise idea to attempt to handle lease negotiations yourself. Hiring an experienced real estate attorney is money well spent. An attorney provide valuable insights and protection for business renters.


We strongly recommend that you consult with counsel prior to signing any legal documents. To give you an overview and factors that should be spelled out in the lease agreement consider the following:

  • Whether or not the tenant can erect a business sign.
  • The size and type of signage allowed.
  • Is there an automatic lease renewal at the end of the lease.
  • When the landlord is able to enter the premises with or without tenant permission.
  • Who is responsible for paying real estate taxes and flood insurance?
  • The level of traffic allowed in the premises.
  • Is heating included in the rent, or is there a separate charge?
  • Specified uses of the premises.
  • Is the building available to tenants 24/7?
  • Provision for an early termination agreement.
  • Will there be common area maintenance charges such as building elevators, parking areas, landscaping and common hallways?
  • If build-outs are needed by the tenant, who's responsible for the expenses?
  • How are the utilities paid?
  • What is the rental deposit amount?
  • What are the deduction for unrepaired damages, and the associated refund terms?
  • Is your specific business covered under the zoning laws for the building you're considering? You will need this in writing.
  • Is there building security? If so, what are the hours and are visitors required to show state or federal ID?

Please feel free to contact us for a consultation.





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