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What is a Commercial Lease?

A commercial lease is a legal contract that is affected between a business owner and the owner of the real estate involved.

These types of documents are often more complex than residential leases because they are usually heavily tailored to each situation on a case-by-case basis. The lease terms and conditions must be carefully scrutinized and matched to your business needs. It is crucial that this document is drafted properly in the beginning of your acquisition or sale process, in order to avoid any issues that could impact the operation of your business.


Can I negotiate the terms of my lease?

The terms of a lease are generally negotiable. Examples of negotiable terms include: the length of the lease, the cost of rent, assignability or transferability of the lease, deposit amounts, price increases, and whether any modifications to the property are allowable.


What other things should I look for?

Every person’s situation is different. However, the following are examples of common topics that come up when meeting with new clients:

  • Be sure that the length of your lease fits with the needs of your business. If you are a property-owner, you may be looking for a longer-term lease. However, if you are the renter of the property, short-term may be a better fit for you.
  • Examine any clauses that contain rent increases. As a renter, you need to understand exactly what increases mean and how they can affect you. As a property-owner, you will need to be sure that you know how to execute on collecting rent increases.
  • Property modifications and improvements can often leave renters or property owners in a bind if that have not been reviewed thoroughly. Some clauses allow for either or both parties to make modifications or improvements, while others limit such things to one party. You may also wish to include information regarding inspection of a property at the end of a lease, or discussion of pet deposits for damage they may cause.
  • Understand the boundaries of the property involved and whether or not you will be providing use of all facilities or whether you have the ability to use them. This can include parking lots, gardens and courtyards, and bathroom facilities.
  • Ensure that the lease complies with all zoning laws in the locality where the property is located. This can also include whether or not signs or advertising can be erected on the property.

Be certain to consult an attorney before committing yourself to any terms. This includes paying a deposit, signing anything, making a verbal agreement, or moving anything to or from the property.


How do I handle a landlord dispute?

Review your lease contract and read for any terms and conditions that may be application to your issue. Then, be sure to denote any rights and responsibilities that either you or your landlord are bound to. After reviewing these, see if the contract limits you to arbitration or mediation. Once you have done these things, contact us and we will schedule a consultation to discuss your next steps.


Are you unsure what lease is right for you? Read our blogs on Understanding The Major Commercial Lease Types and Understanding Triple Net Leases.


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