Many business owners do not own the buildings they occupy. Instead, businesses will often lease a building with the building owner. For business owners, it can be cost-effective to rent a building for their business and focus their finances on improving the company.
Whether a space is being rented as an office, retail store or warehouse, it is important to have a commercial lease. A commercial lease details the terms of a business’s occupancy in a building and what expectations should be met by both the tenant and landlord. Here is what should be included in a commercial lease:
Term of the lease
One of the main focuses of a commercial lease is the term for which the building is rented.
A building that is leased monthly may give both the tenant and landlord more flexibility. While a yearly lease can give both parties security. There are pros and cons to each, such as the knowledge that a rental agreement will not change for a year in a yearly lease. Yet, this will also mean that the tenant may need to reside in a building for a year despite any changes in the business’s tactics.
Or, there could be difficulty if the landlord decides to alter a monthly lease, causing it to conflict with the tenant’s needs.
Cost and expectations of using the property
The tenant should expect to provide a security deposit and pay rent and utilities monthly. How much the tenant pays should be outlined in the lease. Furthermore, the cost of maintenance and renovations may also be included in the lease.
Termination clause
A commercial lease can also clarify what may cause a tenant or landlord to terminate the agreement. For example, if the rent is not paid or if the landlord fails to maintain the property.
Legal guidance is available to help draft a commercial lease.