If you’re new to the world of commercial leases, there are a few things that you need to know before you get started.
First, commercial leases are nothing like residential leases. Your familiarity with rental agreements, if limited to a house or apartment, won’t help much when you’re reviewing a commercial lease. There are a lot of different terms and unique meanings in a commercial lease that have to be fully evaluated and understood. While most residential leases look more or less the same, commercial leases are highly individualized instruments.
Second, there aren’t many consumer protection laws that pertain to a commercial lease. While regular consumers enjoy significant protections from predatory landlords, business professionals — even new ones — are expected to be savvy and fend for themselves. When you rent a commercial property, it is very much a case of “renter beware.”
Third, unlike the majority of residential leases, there is always a lot of give-and-take when you are getting into a commercial lease. Landlords usually start out with the assumption that they’ll have to negotiate a bit to accommodate each tenant. So, the lease you are originally presented represents the “ideal” lease (for the landlord, anyhow) — not what you have to necessarily settle on. Feel free to go over the lease carefully and make adjustments that you hope to get — knowing that you’ll probably have to find a middle ground with the landlord eventually if you want the deal.
Given that commercial leases can lock you into place for a number of years at a time, signing one is a big commitment. If your business doesn’t work out, you could still be on the hook for the rent until your landlord is able to replace you with a new tenant. Hidden terms in the lease can also make your monthly expenses skyrocket — which can stagnate the growth of any news business. Because of these factors, it’s usually wise to get some legal advice about a commercial lease before you sign.
Source: FindLaw, “Commercial Lease Agreement Overview,” accessed March 16, 2018
