Don’t forget to include these things in your commercial lease

A watertight commercial lease agreement is a must-have document for property and business owners alike. Being a legally binding agreement, a commercial lease needs to be accurately drafted within the California commercial rental property laws. In addition, it must be updated on a regular basis to ensure that landlord-tenant disputes are kept to a minimum. Understanding the components of a commercial lease agreement is critical to the smooth relations between the tenant and the landlord. Here are some of the provisions that should be included in a commercial lease agreement. The parties to the contract Every contract must clearly outline the parties to it. While signing the agreement, it is important that you do so on behalf of your business rather than as an individual. It is not unusual for a commercial lease to require a personal guarantee. If you are the business owner, it is important that you find out the limitations of the personal guarantee such as time or dollar limitations. Contract terms While most residential lease contracts are valid for 12 months, commercial lease contracts can last for as long as 10 years or even more. Before signing a commercial lease contract, it is important that you consider both the initial term as well as the renewal rights. A lease contract might automatically grant renewal rights to the tenant while others may require both parties’ mutual consent before renewal. While considering terms, it is also important that you understand what will happen to the rental payments upon renewal. Rent payment terms Besides negotiating the rent amount it is important that both parties review other expenses related to the property in question and clearly state who will pay for them. Common expenses in commercial property may include maintenance fees, utilities, taxes, and insurance. Since these expenses are usually passed on to the tenants, it is important to understand how they are calculated and divided among the existing tenants. A lease contract outlines the duties and responsibilities of both parties and minimizes disputes. Before signing a commercial lease contract, it is important that you understand the provisions you are getting into.

After identifying your business premises, you may want to sign the lease and secure the property immediately. However, it may not be the best way to go about things. Even if the landlord asks you to sign a standard agreement, it is in your best interests to refrain from signing any legally binding contract before carefully reviewing it. Ensuring that your lease agreement does not contravene local property laws is a good place to start. Then you need to understand all the terms and conditions in the agreement, especially those masked in legal jargon. Below are some terms to look out for, and if they are part of your lease agreement, you should consider not signing. 1. Making your security deposit non-refundable Most landlords ask for a one to three-month deposit, but it is usually refundable upon the end of the contract. Watch out for clauses that imply you may not get it back. 2. Granting the landlord unlimited access As the tenant, you have a right to privacy and quiet enjoyment of the property leased. Don’t sign a lease that gives the landlord unrestricted access to the property whenever they wish. 3. Requiring the tenant to be responsible for all maintenance You should not sign a lease that puts all maintenance responsibility on yourself. The landlord should cover maintenance costs that make the property habitable such as a leaking roof or plumbing issues. Agreeing to bear all expenses related to maintenance could be a costly decision for you or your business if anything goes wrong. Protecting yourself means being conversant with real estate law pertaining to lease agreements. Doing so will ensure that the lease you sign is not a burden for you in the future.

Typically, only residential leases have clauses specifically addressing companion animals like dogs. Commercial leases usually don’t talk about animals or pets at all. However, that has begun to change. Pet ownership has been on the rise in the United States in recent years, and many professionals dislike the idea of leaving their beloved companion animals at home all day while they work. If you are about to lease office space or retail space, should you consider asking your landlord to include a clause that allows pets? The benefits of a pet clause If your landlord agrees to accommodate employees’ animals at the rental space, that could make your company’s job openings much more attractive to many professionals. Being able to bring your dog with you to the office if the animal behaves properly is an attractive benefit that many people would jump at the opportunity to have. Additionally, pets can attract customers to retail spaces and can give your company a very friendly, community-oriented feel. The risks of asking for a pet clause in your lease The first and most obvious concern is that the landlord will not only be unreceptive but may no longer be willing to rent to you out of concern that you could bring animals into the building anyway. It’s also possible that you may have to pay more for the space if you ask for that additional accommodation from the landlord. The landlord could also increase the rental costs they intend to charge you or expect you to carry even more insurance while renting the space. Learning about the different terms you can add to a commercial lease can help you negotiate for the most favorable ones possible.