Why Businesses Need an Attorney for a Commercial Lease Agreement
September 18th, 2023
Many businesses need to lease commercial space. Before you sign a commercial lease agreement, it is important you understand the lease terms, your obligations, and that the terms accurately reflect your agreement with the landlord.
Before a commercial lease agreement is drafted, there is usually a preliminary agreement in between the landlord and the tenant. These terms and conditions are often memorialized in a Letter of Intent (LOI). The lease agreement should reflect the terms identified in the LOI, and having a commercial real estate attorney review the agreement will ensure that the terms of the lease agreement reflect the terms of the LOI.
Explain the Terms of the Commercial Lease Agreement
A commercial lease agreement can be complex and intimidating. Commercial lease agreements often include dozens of pages filled with technical legal language that can be difficult to understand. When you work with RKPT, our experienced real estate attorneys will review the document, explain its terms, and verify that the contract accurately reflects your understanding of the agreement with the landlord.
Commercial Lease Agreements Offer Fewer Protections for Tenants
Many people have signed residential lease agreements. While the concepts behind a commercial lease agreement are similar, the terms of a commercial lease agreement are often significantly different than those contained in a residential lease.
Perhaps most importantly, a commercial lease does not offer tenants the same protections as a residential lease. Commercial tenants usually have fewer protections and more responsibilities than tenants leasing residential space. With many commercial leases lasting three, five, or even ten years, a bad decision could impact your business for years.
Negotiate for More Favorable Lease Terms
Most commercial lease agreements include terms that are written to benefit the landlord. An experienced commercial real estate attorney can identify unfavorable lease terms and negotiate terms and conditions that will help your business.
Commercial lease agreements are often tailored to the specific needs of your business and specific considerations for how you intend to use the commercial space. As a result, commercial lease agreements often include unique terms, which makes them more difficult to adjust than a residential lease agreement.
Our commercial real estate attorneys will take the time to learn about your business and how it operates. We can use this information to better understand the needs of your business and negotiate for terms in your commercial lease that will benefit you.
Protect You Against Personal Liability
Some commercial lease agreements include a personal guarantee. When a lease contains a personal guarantee, you are personally liable for the loan, and the landlord can sue you personally, not just your business, for any violation of the commercial lease agreement.
Most commercial leases involve significant negotiations before the final agreement is signed. During this process, many things can go wrong. During this process, can identify lease terms that are not in your favor and add terms that will offer you additional protection. A commercial real estate attorney can help protect your interests.
Contact our Real Estate Attorneys at RKPT
Our attorneys in the Real Estate Practice Group at RKPT thoroughly understand the complex nuances of commercial real estate transactions. We will learn about your business and carefully evaluate the legal and financial issues involved to protect your interests throughout the process.