If you are looking to create a commercial lease agreement that protects your rights and interests, you came to the right place.
Here is what you need to know:
A commercial lease agreement is a legal document that outlines the rights and obligations of both parties involved in renting a commercial property:
- The landlord is the owner of the property who grants the tenant the right to use it for a specified period of time and for a specified purpose.
- The tenant is the business owner who pays the landlord a monthly rent and agrees to follow the rules set by the landlord.
A commercial lease typically establishes:
- The term of the lease
- The rent amount
- The security deposit
- How much the tenant has to pay for utilities, maintenance, taxes, insurance, and other costs related to the property
- How much the rent can increase over time
- What kind of business activities the tenant can conduct on the property
- Whether the tenant can transfer or share their rights to another party
- Who is responsible for keeping the property in good condition
- Whether the tenant can make any changes to the property
- What kind of insurance coverage both parties need to have
- Who is liable for any losses or damages caused by either party
- What happens if either party fails to fulfill their obligations or wants to end the lease early
- How both parties will handle any conflicts or disagreements that may arise
Commercial leases can vary depending on the type of property, the type of business, and the market conditions. One of the main factors that differentiate these agreements is their method of payment: gross or net.
A gross lease agreement is also known as a full-service lease agreement. In this type of lease, the tenant pays a fixed amount of rent each month that covers all operating expenses. This type of lease is more tenant-friendly as there are no hidden costs.
A net lease agreement is where the tenant pays a lower amount of rent each month but also pays for some or all of the operating expenses.
There are different types of net leases depending on how the operating expenses are shared between the landlord and the tenant:
- A single net lease is where the tenant pays for property taxes in addition to rent
- A double net lease is where the tenant pays for property taxes and building insurance in addition to rent
- A triple net lease is where the tenant pays for property taxes, building insurance, and maintenance in addition to rent
A net lease agreement is more landlord-friendly as it shifts more costs and risks to the tenant. However, it also gives more control and flexibility to the tenant over their operating expenses.
How to Create a Bulletproof Commercial Lease Agreement
The process of creating strong commercial lease agreements is actually rather simple, and it only involves one step: hiring a lawyer to do it for you.
These agreements are complex and binding legal documents that can have significant consequences. Therefore, it is highly recommended that you hire a lawyer who specializes in commercial real estate law to draft your lease agreement for you.
A lawyer can help you understand the legal implications of each clause, identify any potential pitfalls or loopholes, and advise you on how to protect your interests and rights.
Tips to Keep in Mind
Do not be afraid to negotiate the terms that are important to you, such as the rent amount, the term length, the rent escalation clause, the permitted use clause, etc.
Also, be prepared to make concessions on some terms in exchange for getting better terms on others. Remember that everything is negotiable until you sign the contract.
If you are looking for a reliable and experienced law firm to help you with your commercial lease, look no further than Jurado & Associates, P.A.
We are a team of dedicated and qualified lawyers who specialize in commercial real estate law and have helped countless clients with their commercial leases, from drafting and reviewing to negotiating and enforcing. If you need help with a commercial lease, do not hesitate to contact us today. You can reach us by phone at (305) 921-0976, by email at [email protected], or by WhatsApp at +1 (305) 921-0976.