Commercial Lease Agreements 101

Negotiating a commercial lease is nothing like a residential lease for an apartment. Commercial leases come with a wide variety of types and options, so it’s important to understand which type of lease is best for your business and the space, as well as understanding key terms that impact your negotiation. When you’re negotiating a commercial lease, it’s important to know:

• There are no standard forms - each commercial lease is customized to the landlord’s needs
• Commercial leases are long-term and binding - you can’t easily break or change a commercial lease; it’s a binding contract and there is usually a good deal of money at stake
• Negotiation and flexibility - commercial leases are generally subject to much more negotiation than a standard residential lease, which means more opportunities for small businesses

Types of Leases

There are many types of commercial leases that cover a wide variety of scenarios. Leases usually fall into a specific “type” because of the way in which the lease breaks down who is responsible for which costs associated with operating the property. Lease types range from Single Net Leases to Industrial Gross Leases and even Full Service Leases. It’s important to understand who is responsible for what when you’re negotiating a commercial lease.

Understanding Key Vocabulary

There are some key vocabulary terms when it comes to negotiating a commercial lease, and it’s important to understand what they mean and how they impact your negotiation. When negotiating a commercial lease, pay close attention to:

• Party Indemnification
• Economic Terms
• Length of Leasehold
• Default Provisions
• Estoppels
• Attornment
• Assignment
• Condemnation
• Insurance
• Indemnity
• ADR Provisions

If you don’t understand any of these terms, or how they impact your commercial lease negotiation, it’s a good idea to enlist the aid of an experienced business attorney.

Ultimately, you must make sure the lease will fit your business, and that the space will accommodate your needs. Make sure the critical lease terms are terms you can comply with, and that you’ve negotiated a favorable commercial lease that will serve you well for years to come.

If you need help with any of the above issues then please call The Posey Law Firm, PC by dialing toll free 1-888-269-1962.