5 Ways to Better Understand Your Commercial Property Lease!
While there are laws in place for your protection, for the most part you and your landlord set your OWN terms of agreement in a commercial deal. Most of the traditional tenant protections are in place for residential leases only.
The law presumes that the parties entering into a commercial lease are of equal bargaining power and edification in business matters. There is no requirement for landlords to explain vague terms.
Draft day: Entering into a commercial lease agreement may mean it is time to consider using a lawyer.
- You may want to offer to draft the lease so that your lawyer can start with something that is most favorable for your side. If the other party drafts the lease, your lawyer can point out provisions that are less favorable for you and negotiate them with the other person
Improvements and alterations provisions are a big part of commercial leases.
- Landlord and tenant will want to agree ahead of time about who is going to pay for improvements – if the improvements are “tenant specific” – such as installing mirrors and bars and special floors for a ballet studio – who is responsible for paying for them?
- What about fixtures that would be needed in any space, like lighting and heat and bathrooms?
You may also want your lease to contain a provision that provides for attorneys’ fees to the winner of a lawsuit in the event that one person violates the terms of the lease.
Make sure the terms of your lease are extremely clear with respect to term, rental amount, and division of responsibility between landlord and tenant.
An attorney can point out key provisions that may be missing and knows the proper language to protect you.
Be aware that it is common for commercial leases to be “triple net”.
Triple net means the tenant pays all taxes, insurance, and maintenance in addition to standard lease fees such as rent and utilities. However – everything is negotiable!
A lawyer can offer you clarity prior to negotiation on issues like “triple net” and point out any potential poorly drafted lease provisions to avoid unpleasant surprises!
I am here to help you with any commercial lease questions you may have, and am your Chicago commercial attorney resource for all things legal. Feel free to reach out to me should you want to learn more!
Junilla J. Sledziewski, ESQ.
@junillaesq – Twitter & Instagram
These materials have been prepared by Statman, Harris & Eyrich, LLC for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel, as the advice appropriate for your particular circumstances may vary.