Commercial Lease Contracts

When a business is looking to rent a facility to run your business through, they'll be looking to sign a commercial lease. A commercial lease agreement is best handled with the use of an attorney, but essentially the information contained in the lease should contain the length of the lease, the potential for rent increases, subleasing assignments and options, and any tenant improvements.

Lease terms are generally in favor of the landlord, so the renter should negotiate the best terms for his business.

Power to Negotiate

The power to negotiate a lease fluctuates depending on the overall condition of the rental market. If the renter is in a hot renting market, the ability to negotiate the terms of the lease is lower. Also, if the unit is a unique space or a popular location, it's going to be more difficult to negotiate agreeable terms.

It's important to note that one of the most important traits of a lease agreement is the length of the contract, which is referred to as the term. Ideally, shorter terms are better because they provide the renter with better flexibility when it comes to changing those terms. However, a long-term lease usually puts the landlord at ease, which can put the renter in a better negotiating position.

Options to Renew

Once the initial terms are set, the landlord and renter decide on the options to renew.

This is a great way to provide the renter flexibility and the landlord with options for consistent revenue. Most contracts include one or two options. Once the terms and options are decided, the parties agree on any other housekeeping details.

Additional Details

While a commercial lease contains the basic information like the rent amount and due date, as outlined above, there are other pieces of information that should be included in the agreement.

To start, if there is off-street parking, that option should be included in the lease. Some commercial buildings have limited space, so each office or tenant may only be allowed a certain number of parking spaces per unit.

Also, a full legal description of the property may also be outlined in the lease agreement. This is generally in the area when entire pieces of real estate, both building, and land, are leased out.

Details of Property Use

Lastly, the details of how the property is to be used may also be included in the lease agreement, as well as if the landlord will allow signage and other forms of advertising to be placed on the leased property.

Property maintenance and care are also a major consideration for both the landlord and tenants. Code compliance must be met in accordance with the municipality the property is located in, and the tenant should make sure that all codes are followed. Also, the tenant should understand exactly who is responsible for the upkeep of the landscaping, and who will shovel sidewalks and plow driveways and parking lots during the winter months.

Articles You Might Like


© 2019 Realtor. All Rights Reserved.