Commercial Leases

Commercial leases are complicated. Which is why you should always have a knowledgeable attorney review – but these tips will help you sort through the legal jargon.

Research is the key – look at the building owner, landlord, zoning laws, environmental expectations and nuisance laws.

Landlord and building owner are often different. If the landlord fails to make their payments to the building owner, you can end up getting evicted in the event of foreclosure, even if you’ve made all of your rent payments -Know how much you have to pay, what exactly you’re covering and how much your rent will increase each year. Some commercial leases include extra payments (e.g., utilities, insurance or maintenance), while others fold all of your expenses into one monthly lump sum.

Both with payment structure and term, make sure you understand exactly what you’re on the hook for each month. Ask your potential landlord about how the following expenses are paid:

• Insurance
• Property taxes
• Maintenance (both interior and exterior)
• Repairs
• Security
• Parking
• Local nuisance laws (noise or scent)
• Utilities (water, gas, electric)
• Modifications (whether you can adjust the interior or exterior of your space)

Establish details on how your commercial lease will be transferred if your business closes or you move. Two examples are assignment of the lease, which allows another business owner to fully take it over, and subletting.

Significant distinctions between residential and commercial leases -Commercial offers less protection to tenants -Commercial is often longer-term (3-5 years)

Everything can be negotiated! Work with an attorney to get the best deal for you and your business.