Commercial leases are frequently complicated documents that need to be drawn up with great attention to detail. The terms governing commercial and residential leases differ quite dramatically. Some of the main areas of difference to consider are:
Residential leases are for townhouses, houses, apartments, and condominiums, whereas commercial leases are for commercial properties where the primary purpose of the property is as a place of business including office, retail, and industrial space. That being said, tenants do often run small businesses from their homes under a residential lease. They still do not, however, fall under the scope of a commercial lease unless they signed a commercial lease when moving into the property.
This article focuses on this process from the landlord’s perspective. We’ll have an article up soon should you be interested in your position as a tenant. For now, let’s dive a little deeper into the complexities of a lease agreement and points you, the landlord, should be aware of.
Commercial leases are different to residential leases as they require provision for space for advertising, terms regarding upkeep and maintenance, differentiation between tenant and landlord property and of course, a non-compete clause.
Some main points to consider are:
The advertising clause is of particular interest as the tenant should be made well aware of how he or she is allowed to advertise their business and what constitutes inappropriate advertising with regards to content and placement. Your tenant may feel as though they are unjustly being curtailed in their attempts at promoting their business and you, on the other hand, might perceive their advertising to be disruptive, obscene, or inappropriate for your premises. Having terms set in stone from the onset can prevent needless conflict down the line.
Terms regarding Maintenance, Alterations, and Upkeep of the Property
Who pays for and performs maintenance? What future plans do you have for your property? Do your plans involve major renovations and have you made provisions for these in your lease agreement? Your tenant might feel that major renovations could interfere with their business and should be made aware of any changes you have in the pipeline. The key here is to plan for the future and take all necessary steps to ensure positive ongoing relationships with your tenants.
In addition to the above, it’s always important to consider how to proceed should your tenant be unable to pay rent. What do you do when you get stories about waiting for a client to pay instead of your rent money?
Taking all of the above into account, what’s the best way to proceed? Hire a commercial lease lawyer to work alongside you in understanding and creating contracts. You’ll have a clear picture as to what exactly the agreement stipulates, the laws binding you when you sign the agreement, and what to include and omit from an agreement when making one.
This is just one example of how commercial lease lawyers can assist you in navigating commercial leases. Making use of a firm that you can trust on an ongoing basis is essential in avoiding potential legal pitfalls down the line.
Van Zyl Ebrahim Cook Attorneys Incorporated are experts in commercial contracts. Should you need a commercial lease lawyer, click here for a full breakdown of our offerings for this service.