Businesses interested in renting space are wise to review commercial lease contracts before signing the agreement. A failure to careful consider all the terms of the document could result in unexpected surprises in the future. Three examples to pay close attention to include:
- Maintenance. One of the most common disputes between a landlord and tenant in a commercial real estate agreement involves maintenance. Who takes care of repairs if something breaks? When is it the responsibility of the tenant? Review this provision carefully and negotiate changes to better ensure the provision meets your goals.
- Use. In many cases a commercial lease agreement will include limitations on use. The landlord will control what types of services tenants can offer within the building. As a result, tenants need to review this provision to ensure the landlord allows the intended purpose.
- Force majeure. This legal term is used to guide how the agreement is impacted by extenuating circumstances. The current coronavirus pandemic provides an example of the importance of these provisions. Depending on the language of this provision, some tenants were able to suspend lease payments while others were not. Additional examples can include strikes, floods, storms and wars.
These provisions are not set in stone. Potential tenants can negotiate with landlords to get an agreement that better meets their needs. It is also important to note that these are only a few of the many provisions to review before finalizing the agreement. As a result, it is often wise to seek legal counsel to review the document and negotiate on your behalf.