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How do commercial lease disputes arise? 

On Behalf of | Feb 2, 2022 | Commercial Leases

Commercial lease agreements often bring numerous benefits to all parties. The operator of a business has a desirable space to carry out their commercial activities, and the owner of the property receives a steady income. 

Unfortunately, commercial lease agreements do not always work out, and disputes may arise. So, how does this happen? And how might such disputes be resolved? 

Unambiguous terms in the lease

More often than not, disputes regarding commercial leases relate to the terms of the contract. It is vital that contractual terms are clearly expressed so that all parties know exactly where they stand. Frequently, tenants assume that they have access to certain utilities, which the owner had no intention of including in the deal. Confusion over contractual provisions is a sure way for conflict to occur, so it is vital that all parties have a frank discussion about their expectations before committing to a deal. The outcome of these conversations should be incorporated within a watertight contract.

When a landlord oversteps the mark

A landlord may rely upon the profitability of a business to ensure that they obtain regular payments. This means that they have an active interest in how business operations run day-to-day. Their motivations may stem from securing short-term payments, rather than ensuring that the business remains profitable for the duration. Tenants may be at odds with these values, making the possibility of a dispute much more likely. 

When a tenant oversteps the mark

It is possible that tenants overstep the mark and wrongly assume the position of the property owner. For instance, they might opt to make significant renovations to the property without any permission. For this reason, it is vital that a lease agreement clearly sets out who is responsible for building repairs and renovations. 

Commercial leases can be beneficial for all parties, but only if they are well-drafted. If you are facing a dispute over commercial real estate, be sure to gain a firm understanding of your legal rights in California