The Commercial Lease: Why an attorney should be at your side.
Before you sign a lease on a commercial property for your business and commit your finances to every landlord-friendly clause contained therein, it is wise to have an attorney review the lease.
Because many commercial leases cover a 3-5 year term, you could find yourself locked into a contract that has you paying more than you bargained for with no easy way out. An attorney will help you compare rents and fees for similar spaces and can often negotiate better terms based on the surrounding market.
Lease factors to consider include parking availability, common area designations, external lighting, security, upkeep, maintenance, and renovation responsibilities. Does your lease specify who is responsible for large, unpredictable expenses such as HVAC replacement, storm and weather damage, roof repairs and a host of other untimely costs? Does your lease contain a casualty provision that allows for lease termination and requires timely and complete repairs by the landlord? Have all insurance requirements been met? If your lease doesn’t spell out who is responsible for what, you may find yourself paying far too much, having signed a lease full of regrets.
Common area maintenance, or CAM charges can add a considerable expense. An attorney will examine your responsibilities as a tenant, what expenses the landlord is expected to pay, and may suggest a clause instituting a cap on CAM charges for your protection. An attorney will review all CAM provisions and ensure charges have been formulated and calculated correctly. If CAM charges are excessive, he or she may request an audit.
Approval for changes or renovations made by the tenant, the physical state of the premises at the end of the lease term, and whether it is the responsibility of tenant or landlord to restore the premises to its original condition when the lease has been completed should be set forward in detail at the beginning. Any work clauses detailing the landlord’s responsibilities prior to tenant occupancy should be listed as well, with a precise timeline and remedies for the tenant should the landlord fail to meet obligations as agreed.
Your attorney represents your best interests and will examine penalties contained in the lease, verifying that none are excessive, unreasonable, or predatory. He or she will review your termination rights to ensure your business is protected if the lease is terminated for any reason. He or she will identify and remove any boilerplate clauses snuck into the fine print, will look for any inconsistencies not typically contained in other leases, and will limit your liability wherever possible, saving you money while protecting your business from an unsavory contract that could haunt you for years.