In this day and age, many companies are choosing to lease commercial property, rather than purchase it. If you are considering entering into a commercial lease there are a few basic facts you should know about the process before you commit to any terms or sign any agreements.

Because the commercial real estate market is oversaturated with vacant properties, and the demand for such properties isn’t as significant as previous years, you can find good bargains on real estate that will satisfy your company’s needs.

Finding the Right Commercial Property

Much like residential, the commercial leasing process begins with your search for property that meets your criteria. In Florida, there are several types of properties in a variety of prime locations to choose from.

Once you decide on the property, whether a standalone structure or office space in a multi-story building, you (the tenant) should enter into a written lease agreement with the owner of the property (the landlord) or the management company acting on its behalf.

What is a Lease Agreement?

A lease agreement is similar to any other written contract in that the parties (the tenant and landlord) specify the terms of the lease in a legally binding and enforceable written contract (the lease agreement).

The duration of a lease can range anywhere from month-to-month, to one year or multiple years. The landlord and tenant can be individuals and/or entities. Under some circumstances, the costs of the utilities are included in the monthly rent and the tenant is not responsible for making any payments other than the rent each month. In other instances, the utilities are not included and are the responsibility of the tenant, in addition to the monthly rent.

Terms of a Commercial Lease Agreement

Typically, a lease agreement will specify the following terms:

•    The parties of the lease (the landlord and tenant);
•    The duration of the lease term;
•    The amount of rent; and
•    Which party is responsible for paying the utility bills.

The terms of a lease agreement, although often similar, are not the same in every situation. Some lease agreements may include additional terms and conditions.  It is imperative that you fully understand what is expected of you and the landlord, and make sure the terms are fully represented in the lease agreement prior to adding your signature.

Structures of Commercial Leases

A commercial lease can be structured in different ways. Generally, on the last day of occupancy specified in your lease, your tenancy terminates absent any other agreements between the landlord and tenant. If your lease term is from one year to another or is month-to-month, it’s considered a periodic tenancy. This means your lease won’t terminate and will continue without an exact termination date. According to Florida real estate law, a periodic tenancy renews automatically from one period to another.

Unlike simple lease transactions, commercial leases are more complex and typically require more revenue. Before you enter into a lease agreement for a commercial property, it is imperative that you consult an attorney that is knowledgeable about Florida’s commercial real estate laws, as well as the entire leasing process.