Renting Commercial Property - What Every Business Owner Should Know About Commercial Property Leases

 Posted on December 00, 0000 in Commercial Lease Agreements

Most Americans have rented a home, apartment, or condominium at some point in their lives, but only a small fraction rent commercial spaces for their businesses. As such, many renters are unaware of the differences between commercial and residential leases. Yet, as the following explains, these differences can catch you off guard, especially if the market turns or your business fails. Learn how to mitigate against such situations, and discover how an attorney can help protect you with your commercial lease agreement issues.

Commercial Leases versus Residential Leases

Despite any misconceptions that commercial renters may have about commercial leases, they are significantly different than residential leases. In fact, the agreement itself is not standard. Instead, it reflects each landlord's needs and preferences. Second, they are often longer and can cost you a great deal more money if you breach the contract. Flexibility and negotiability are also lower in commercial leases, and there are fewer consumer protections. All these aspects, when combined, make for a potentially catastrophic situation for commercial renters.

Reviewing a Commercial Lease Agreement

Although it is a good idea to read through any lease to ensure you understand and agree with the terms, it becomes crucial that you do so before signing a commercial lease agreement. Consider pertinent elements, such as:

• Rental fee (can you afford it?);
• Rental term (if your business is just starting up, a 10-year lease may not be optimal);
• Any modifications that may need to be made to the existing space;
• Zoning issues that may affect your business;
• Security deposit and conditions for its return;
• Repairs and maintenance (who is responsible?);
• Subleasing (is it permitted?) and lease renewals;
• Requirements for terminating the lease;
• Marketing and advertising needs (can you put up sidewalk signs, etc.);
• Competitor leasing (can your landlord rent to a competing business?);
• How disputes are handled;
• Space included in your agreement; and
• If you are signing a gross lease (insurance, taxes, etc. are included in the agreement) or a net lease (you pay for the items separately).

Negotiating a Better Contract

Being unhappy with a contract does not mean you cannot rent the space, or that you must turn it down. Instead, you can attempt to negotiate better terms. Keep in mind that it is advised that you seek assistance from an experienced real estate attorney; not only can this help to ensure you understand the terms and agree to them, it can also give you an edge in negotiations when dealing with a commercial landlord, where your rights are less protected.

Backed by almost a decade of experience in handling high-level, commercial matters, Lindell & Tessitore, P.C. can assist with your commercial lease needs. We can even represent you in a litigated matter. Schedule your personalized consultation with our Naperville commercial real estate lawyers to ask how we can help with your situation. Call 630-778-3818 today.

Source:

https://www.forbes.com/sites/groupthink/2015/06/02/negotiating-a-commercial-lease-heres-what-you-need-to-know/#6fd0fa422d5c