Commercial Lease Agreements - Tressler & Associates, PLLC
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Restaurant for lease as an example of commercial lease agreements.

Commercial Lease Agreements

Many people will sign some kind of lease agreement in their lives. Usually, when someone thinks of a lease, they think about a residential lease between a landlord and a tenant. When you’re a business owner who needs to rent out a space for your business, the process can appear similar but has some key differences. When you’re looking to create commercial lease agreements, don’t treat it like you would any residential lease.

There are several factors to consider with a business location that you would have with a living space. There are also factors you don’t need to consider because no one is living at a business location. To make sure everything is properly considered and taken care of, contact experienced real estate and corporate law attorneys at Tressler & Associates.

What’s Different About Commercial Lease Agreements?

Commercial and residential lease agreements are for different purposes. Running a business requires different equipment, environments, and availability from a living space. This comes with more rules and regulations, many of which residential lease agreements do not have. Some of these differences are subtly different from clauses in residential lease agreements, and some are only in commercial lease agreements.

  • Rules dictating business hours. There are no limits to how long or what time of the day you can be in a residential residence. A business may have to close earlier if it leases out one location over another. 
  • Rules on how the property can be used. Many commercial lease locations can only support specific kinds of business. A storefront may not have much trouble finding a location because they don’t require complicated equipment as often as other businesses. A restaurant or food provider won’t always be accepted because of the equipment they require. Some landlords may not want certain types of business on the property, and other locations may not be able to support it.
  • Responsibilities for repairs and maintenance of the property. Zoning laws tend to be more consistent with residential properties than commercial properties. This means whose responsibility it is to repair or maintain the property changes. How likely a business is to cause wear and tear or damage to the property affects who will be willing to take responsibility for what is on the property.
  • Rules regarding rent increases. You likely work your operating budget around the cost of the rent. If rent increases, you can’t change your business’s contracts and production line with less than a month’s notice. If you’re a landlord and new taxes or costs make it necessary for rent to rise, you can set up emergency funds or systems to help your tenants survive a rise in rent. This consideration has to be in the contract.
  • Rules regarding early terminations. Residential properties have strict agreements on when and under what conditions tenants can be terminated due to state law. Lease contracts between landlords and businesses have more freedom. Due to this, a business is at the landlord’s mercy, so the landlord can offer more contractual assurances than usual. 
  • Rights to subleasing. Subleasing, also known as subletting, is when the original tenant rents out a space of their rented property to a third party. The original landlord can allow this with rules or refuse their tenants the right to do this.
  • Habitability standards are different. Habitability is a term used to define whether a space is livable. With residential lease agreements, they have to maintain habitability, but commercial lease agreements do not. Any expectations for how habitable the property will be and must remain should be stated in a contract.

Protect Your Business With Tressler & Associates

Whether your business needs a new location or you’re a landlord, you’re going to need a commercial lease contract. These are integral to protecting your property and the safety of your business. If you’re worried your contract has a loophole or is missing something important, you need to have a legal professional look at it.

The real estate and corporate law attorneys at Tressler & Associates will make sure that your commercial lease agreement isn’t going to put you at the mercy of your landlord, or in a vulnerable position with the market. We want to protect your business and maintain its success. For legal advice and representation, contact us today.

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