Five Things to Consider Before Signing a Commercial Lease

If you own commercial property and you are thinking of leasing commercial space to businesses and individuals, then you need to speak to a knowledgeable real estate lawyer. The parties to a commercial lease can dictate the terms of the agreement, and commercial leases generally offer more protection to business owners and landlords than residential leases.

Landlord and tenant laws might be irrelevant to a commercial lease if the parties both decide to opt out of those protections.

Consider Retaining a Business Lawyer

If you are negotiating the terms of a commercial lease, you should retain a business lawyer from Mullen Holland & Cooper P.A. A skilled and knowledgeable business lawyer can alert you to possible pitfalls in your lease. We can also suggest provisions that would provide additional protection for you. Because we also practice commercial real estate law, we are up to date on zoning laws and building code regulations.

If you are leasing commercial property, you must protect yourself. Retaining a business lawyer will enable you to focus on what you can do to make the lease more favorable to you should a discrepancy or contradiction arise in the future. Mullen Holland & Cooper P.A. is available to help you navigate the complex world of commercial real estate law.

Make All Tenants Provide Personal Guarantees

Commercial property lessors should make every tenant sign a personal guarantee. The business owner or individual who owns the enterprise will then be personally responsible for the provisions in the commercial lease.

These added protections will help you hold the business owner liable if the business entity harms you or the leasing space in some way. A corporation can be dissolved, but if you make an individual owner guarantee payment on a lease, then you are more likely to see a return on your investment.

Tailor the Lease to Protect Your Property

When you’re drafting the lease, you can include provisions that keep the tenant from harming your property and its surroundings. For instance, you can specify:

• What hours the business may be open
• How the property can be used
• That the tenant will be responsible for the costs of and performing repairs and maintenance
• That the tenant will be responsible for the costs of any new construction required by their business
• Rent increases
• Provisions that will provoke early termination
• Whether commercial subleasing will be allowed and how it will be handled

Watch for (and Delete) These Provisions

There may be provisions the tenant wants to include in the lease that go against your best interests as a property owner. Those might include:

• If the tenant moves into adjacent spaces in the building or in other property you own, the tenant insists that work they desire on the new space be done by you prior to their move-in date.
• Clauses that prevent you from leasing nearby spaces or property to the tenant’s competitors.
• Onerous provisions that exceed the requirements of the Americans with Disabilities Act’s requirements for making a property accessible.

Use Your Discretion

You must use your discretion and business acumen when you are leasing commercial real estate. If you want to have healthy business relationships, you need to be discerning about who you choose to do business with. Protecting yourself early in the negotiation process can help you avoid problems that can arise months later.

Do not lease commercial property to illegitimate businesses or to business entities who have a history of breaking leases or being evicted. The signs will be present if you perform your due diligence. Focus on leasing property to dependable and reliable commercial tenants.

Talk to a Commercial Lease Lawyer

Retaining an experienced lawyer with knowledge of corporate and real estate law is essential if you are planning on signing a commercial lease. We can ensure that your commercial leases are beneficial to you and are appropriate for your tenants. We have years of experience representing commercial lessors who want to strengthen their portfolios and obtain more reliable commercial tenants.

Contact Mullen Holland & Cooper P.A. today at 704-864-6751. We can look over your commercial lease and explain your legal options.