Are you thinking about renting a commercial space? Leasing, in general, can be a complicated and confusing process. Commercial leasing in particular, however, can come with its own specific challenges.
You should never enter into a leasing arrangement without ensuring you understand both the risks and benefits of the transaction. Without proper awareness, you may be facing significant legal and financial hurdles in the future.
At Smiley Law Firm, we help clients prepare and negotiate the commercial lease they need to fit their needs. There are major differences between commercial and residential leases. Most people and businesses are familiar with residential leases. Our law firm does not deal with residential leases that often. The cost of disputing a residential lease often outweighs any benefits of a dispute.
However, our office deals heavily in the commercial lease space. Commercial leases are much more complex. Many times it is not just about paying rent. There are many other issues that come into play such as repairs, insurance, and common area issues.
To start off, we explain some important differences between residential and commercial leasing that you should always keep in mind:
Commercial property usually costs much more than the average residential one. This factor obviously greatly varies depending on the specific business involved but for large commercial properties, significant monetary compensation is usually involved.
Commercial leases are usually longer in duration than residential leases. While the average residential lease is usually set for just one year, commercial leases tend to last five or more years. This means the commitment you are about to enter into is one that is harder to get out of in the future. Additionally, you are about to embark on a long-term relationship with your landlord. As significant penalties are usually involved with unjustifiable breaches of a commercial lease, it is highly recommended that you maintain a positive and healthy relationship with your landlord from the very onset.
The good news is that commercial leasing usually offers more wiggle room than the standard residential leasing arrangement. Meaning, there is often much more back and forth between the landlord and client. Though this can be good news for you if you have some specific demands it may also mean that the landlord will likewise request unique privileges or conditions. Always pay attention to not only the contract itself but the discussion that leads to it.
4. Standard Forms
Commercial leases, unlike many residential leases, are often not standardized. Rather, they are customized to the specific needs of the particular landlord. If you are signing a non-standard lease, make sure to carefully go over all the terms and conditions. You should understand what you are agreeing to and the legal language being used. Ask questions if a term or condition is unclear.
With all these factors in mind, we highly recommend that you consult with real estate professionals before signing any commercial lease. With years of real estate experience in Louisiana, the attorneys at Smiley Law would be happy to hear from you for your next commercial lease need.