So, you’ve found an appealing piece of real estate to rent for your business.
The location seems perfect – convenient for both your customers and employees – and the terms proposed by the landlord are more than fair, right?
Before you make any commitments, make sure you fully understand what lease agreements are and how they work.
A commercial lease is a legally binding and enforceable contract that specifies the terms of the arrangement between you and the landlord.
When you execute a lease, you are agreeing to pay rent (usually monthly) to use all or a portion of the property to conduct business, among other things.
Lease Terms
The terms of a commercial lease will vary from property to property and landlord to landlord.
Utility bills are included in the rental amount under some agreements. In others, you have to pay the utilities each month in addition to your rent.
The same is true for repairs, alterations, and use of the property. The landlord may be responsible for all repairs, but you will likely have to cover the costs associated with any alterations to the space.
As for use, the lease may include clauses that prohibit you from storing certain types of materials and/or using a particular portion of the property.
Read the lease carefully. Understand all of the terms and how they will affect the way your business operates before you offer your signature.
Lease Duration
Most commercial leases are long-term agreements; others cover a shorter period of time. A year-to-year arrangement is considered a periodic tenancy and will automatically renew at the end of each year.
If the lease covers a specific time period (i.e. January 1, 2011 to January 1, 2015) and no other agreements between you and the landlord exist, the lease will terminate on the last day of occupancy.
Commercial leases are complex and binding contracts, and should not be taken lightly. Hire an attorney to negotiate the best terms possible and prepare an ironclad agreement that you are comfortable executing.
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Even when there is no contract involved, a Florida real estate broker can be entitled to a commission fee if he is considered the procuring cause of a sale.
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