When a business is entering into a commercial lease, there are several items they should be aware of including the differences between a commercial lease and a residential lease as well as important terms to include in the agreement.
Differences between commercial and residential leases
While many people have rented an apartment or home at one time or another, a commercial lease is different. The length of a commercial lease may vary, rather than a standard length in most residential lease agreements. It’s not uncommon for a commercial lease to be in place for several years.
Also, businesses may have more leverage to negotiate the terms of a commercial lease. For example, if the business is planning to lease a space for a long time, they may be able to ask for a lower rent rate or may ask to make changes to the property. Usually, those options aren’t available in a residential setting.
Even though the business may have a verbal agreement with a commercial landlord, it’s important that the lease is put in writing. The business will also want to ensure that there is a termination clause in the lease and understand the financial impact of termination.
In addition to setting out the rental rate and the length of the lease, the agreement should address any ongoing fees for common area maintenance. Sometimes, if the parties cannot agree on terms, it may be necessary to find another commercial property to rent.
An experienced attorney can provide guidance to business owners and ensure the lease contains all of the appropriate terms for their circumstances.