How a Real Estate Attorney Can Help with Lease Drafting, Review, and Negotiation

For Lease sign in vacant storefront window visual concept for commercial lease agreement.

A commercial lease agreement is a complex legal document that sets forth the terms and conditions for the rental of a commercial property. It is a legally binding contract that can last several years and will govern the relationship between landlord and tenant by establishing the rights and obligations of each party with respect to the property. They represent a significant commitment that should not be entered into lightly.

The commercial real estate lawyers at RKPT specialize in legal matters related to real estate and property ownership. We proudly represent landlords and tenants in commercial real estate transactions and are frequently called upon to draft, review, and negotiate commercial lease agreements to ensure they comply with relevant legal requirements and protect our client’s interests.

How Is a Commercial Lease Different from a Residential Lease?

A commercial lease agreement specifies the terms and conditions of a property rental when the property will be used for some type of business purpose, such as office, retail, restaurant, or manufacturing. The lease agreement is the foundational document that creates the legal relationship between a landlord and tenant.

Commercial lease agreements are very different from residential leases. Most states have several regulations and protections relating to residential leases that cannot be negotiated or modified. Many of these regulations do not exist in the commercial context. Because of this, it can be extremely helpful to engage an experienced real estate lawyer to help understand and negotiate your rights and responsibilities contained within a commercial lease.

What Are Common Terms in a Commercial Lease?

Even though a commercial lease agreement can be tailored to suit the needs of the parties, there are common matters that are covered in most commercial lease agreements. Standard matters in a commercial lease agreement include:

  • Lease term - how long the lease will last, when it will start, whether it starts/ends on a fixed date or subject to certain conditions, and whether the landlord or tenant can extend the lease or cancel early.
  • Rent - the base rent, the schedule for any rent increases, and other charges in addition to rent payments.
  • Costs - additional items such as insurance, property taxes, utilities and maintenance, and who is responsible for paying them.
  • Alterations and Improvements - many commercial spaces will require some amount of alteration to fit the tenant’s business needs. The lease should identify the rights and responsibilities of the parties relating to how these will be handled.
  • Default and Remedies - what constitutes a default under the lease? What are the remedies in the event the other party does not perform their obligations?
  • Security deposit - how much is it, and under what conditions can the landlord withhold it?

Most commercial leases also specify the permitted use of the property. Additionally, some commercial lease agreements may include an “exclusive use provision,” which can be used to prevent competitors from moving in nearby.

How a Commercial Lease Attorney Can Help

Drafting, reviewing and negotiating a commercial lease agreement can be a challenging and complicated process. Depending on the type of property, nature of the tenant’s business, and several other factors, there are a variety of nuances and considerations to account for before entering into a commercial lease. RKPT’s real estate lawyers have the knowledge, expertise, and experience to protect your interests throughout the entire life of a lease.

Save Time and Money

As a business owner, you are focused on the day-to-day operations of your business and may not have time to focus on real estate matters. By handing these matters off to a professional, you save yourself time and money and gain peace of mind.

Protect Your Interests

Commercial lease negotiations often involve complex terms that can be heavily influenced by both broad and local market conditions. An experienced real estate attorney can help you navigate these discussions to protect you from inadvertently signing a contract that contains unfavorable language or fails to adequately protect your interests.

As your lawyer, our job is to protect your interests. We can identify potential problems and unfavorable terms that could leave you vulnerable to unwanted disputes and unnecessary liabilities in the future. By identifying these issues, we can help you understand the risks and rewards associated with a given lease which allows you to make informed decisions throughout the negotiation process. In the unfortunate event that a dispute does arise during the lease term, our team can assist you throughout the entire conflict to help ensure a satisfactory outcome.

Ensure Compliance with State and Local Laws and Regulations

In addition to protecting your interests, you must ensure your commercial lease complies with applicable state and local laws and regulations. Our commercial real estate lawyers have a thorough understanding of the laws and regulations that govern commercial lease agreements and can review your commercial lease agreement to ensure it complies with applicable laws.

To put our expertise to work for you, call (513) 721-3330 or contact the commercial real estate attorneys at RKPT today.

Categories: Real Estate