Many landlords rent out their properties to businesses. These businesses may be looking for locations to start their services or looking for long-term residency. Whatever the case may be, landlords should be prepared to create a commercial lease agreement that covers several important matters. The terms featured in these agreements may be different from those included in residential leases, providing greater protection for both landlords and tenants.
Broadly speaking, the following concerns should be explicitly addressed in a commercial lease.
The length of occupancy and renewal options
How long does a business wish to rent out a space? This important fact could define the length of a lease and renewal options. If a business is only looking to start operations but is still looking for long-term occupancy, then a lease may be renewed every month. However, a business that wants to rent a space long-term could agree to a multi-year lease.
Rent, security deposit and insurance
How much rent will a landlord charge a business to use a space? Rent should be clearly listed on a lease, including whether a business should expect rent increases and if they are responsible for utilities. The business may also be expected to put down a security deposit for any damages caused during its occupancy. The business may also need to acquire renters’ insurance.
Termination clauses
What would happen if a business needs to terminate a lease early? A landlord may provide a termination clause to allow a business to leave a space earlier than the lease term. A business may be expected to pay penalty fees if it terminates a lease.
Landlords may need to reach out for professional legal guidance to address any concerns that may arise when renting a commercial property to a business, and that is okay.
