Your company is managing to turn a profit, but the margins can be fine at times. Any unpleasant surprises or increases in costs could make the future of your business less secure. You’ve been notified that your rent is set to increase, and you’re concerned about the impacts this will have on your company.
Is your landlord entitled to do this? What are your options if you cannot afford to pay more?
What do the documents say?
It’s important to have a firm understanding of your commercial lease agreement at all times. Some leases include rent escalation clauses, which could mean your landlord is entitled to make increases.
The landlord may opt to increase the rent as their costs, such as utilities and securities, become more expensive. Sometimes, a rent escalation clause will permit landlords to increase the rent at designated times without taking into consideration their costs, etc.
Are you entitled to refuse a rent increase?
It may be possible for you to refuse the rent increase, but you must make sure that you honor the terms of the contract. Your landlord must always adhere to their side of the deal too. The best way to prevent disputes about rent increases is to have a good understanding of the contract before signing up in the first place.
If you’re caught up in a dispute regarding commercial real estate, be sure to take a closer look at your legal rights. Having someone with knowledge of the nuances of real estate law on your side will help you to obtain the most favorable outcome in your case.