Jackson Ross PLLC

What You Should Know About Commercial Leases

When you are ready to start your business and need a business office, retail space or other brick and mortar building to serve as your storefront, you will likely enter into a commercial lease.  In principle, leasing a commercial space is a lot like leasing a residence.  But there are some major differences.  For instance, commercial leases are for longer terms, can be highly customized, and are subject to fewer consumer protection laws.


Commercial leases are usually for an extended amount of time, ranging anywhere from five to twenty years, so a commercial lease is a serious commitment.  If you are considering entering into a commercial lease, it is important that you consult with an experienced business lawyer who can review and negotiate the terms of your commercial lease so as to make sure you are getting a fair and reasonable commercial lease.


Commercial Leases Are Lengthy Legal Documents

Commercial leases are long (typically a minimum of 20 pages) and often contain a great deal of legalese, including Latin phrases, that can be difficult for a business owner unfamiliar with legal documents to decipher.  They also contain a great deal of standard clauses, or “boilerplate” language.  However, everything in a commercial lease has legal significance and cannot be overlooked.  An experienced business lawyer can help you parcel through the legal phrases to identify which clauses may (and should) be subject to negotiation.  Leases and real estate laws vary state-by-state and it is best to secure a local attorney to review a commercial lease.


Commercial leases are lengthy because they have to include a lot, such as the commercial purpose for the tenant’s occupancy, which party is responsible for certain repairs or damage that may occur to the building, who is responsible for upkeeping the commercial property, the duration of the lease, and countless other provisions.  The lease should also include insurance obligations and other contingencies for unforeseen events, and should explain how the parties will be affected by these contingencies.


The good news is that commercial leases are often specifically tailored to your specific leasing situation, but you need to make sure that the terms are suited for your business’s needs.  Is the rent the right rate?  Is the lease for enough space?  Do you want to be responsible for cosmetic repairs, but keep the landlord liable for major repairs, such as burst water pipes or electrical problems?  How would you like the lease to be renewed?  There are a lot of things to consider when you enter into a commercial leasing contract.


It is important that you understand your obligations under your commercial lease.  You need to know what aspects of the commercial property you are responsible for and what aspects of the commercial property your landlord is responsible for.  Your commercial lease will legally bind you for many years, so before entering into a commercial lease agreement, you should consult with a business attorney who has experience negotiating and drafting commercial lease agreements.  Your lawyer can offer you and your business valuable insight and guidance through the leasing process.