Articles Tagged with commercial leases

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AdobeStock_359775405-300x200Tenants across America have faced unprecedented challenges during the COVID-19 pandemic. Most of the eviction moratoriums have focused on residential leases, in order to keep Californians home and healthy during these dangerous times. Small business owners have also been granted some eviction protections. Regardless of your business size, you might be surprised to learn just how much leverage you have in your commercial lease. Below are three critical strategies that can help your business try to remain financially healthy during and in the wake of the coronavirus.

Renew Your Current Lease

Businesses that are on relatively strong financial footing, and whose leases are expiring in the next six to eighteen months, may find themselves with greater leverage to negotiate renewal terms. Landlords are hesitant to lease to new tenants (who they may not be able to evict). With the U.S. economy is in downturn and the economic future uncertain, landlords are also worried about their future rental prospects. In such conditions, commercial tenants who have remained in good financial health and standing with their current landlord will be well-positioned to negotiate lease renewals with favorable terms.

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Everyone knows what they say about real estate: location, location, location. This same axiom is definitely true for many businesses too. While some businesses may operate out of homes and employ their workforce remotely, many operations require a physical location to which workers and customers go on a daily basis. For example, stores, restaurants, and other locally-serving businesses always want to have a prime location with lots of foot traffic and easy access in town. Others, such as manufacturers, need large warehouses with affordable rent and room for all their equipment. While many business owners choose to own their building, many others do not have means to do so, or may not want to commit to one location long-term. For these reasons and more, many business owners lease their commercial spaces.

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For any type of lease agreement or contract, you want to be sure that all of the provisions are fair and reasonable. A proper lease will set out your rights as a tenant, and you want to be sure it does so adequately. A commercial lease will also designate your responsibilities as a business tenant, and you should be aware of any terms that require unreasonable or difficult responsibilities from you. Because each of these lease types can be complex documents with confusing legal language, you should always have any potential leases reviewed by a highly experienced business attorney prior to signing.

Of course, you will want to make sure the length of the lease and rent requirements suit your needs. The following are some additional terms your attorney will consider and review:

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A commercial lease is the agreement between a landlord and a business that outlines each party’s rights and responsibilities as they pertain to the rental of a property that is to be used for commercial purposes. Commercial leases are distinct from residential leases in that the party renting the property uses the property for business purposes rather than as a place to live. All too often tenants make the mistake of assuming that a standard form commercial lease will not hold any surprises; this assumption can have catastrophic consequences.

leases

Your monthly lease payment may be among the largest outlays for a business. Even if it is not, issues that arise regarding your use or access to the property that you rent may have a significant impact on your ability to effectively operate your business. For businesses that require a physical presence in order to sell their goods or services, a misunderstanding or dispute regarding your lease may effectively put you out of business, and could potentially reach your personal assets. As a result, making the investment in having an experienced business attorney review the terms of your lease can save you from making costly errors. Continue reading ›