Business-Minded Legal Solutions

What to avoid in a commercial lease

A commercial lease can help you build and develop your business. As you consider expanding your business, finding a commercial property to support what you do can help you generate growth and demand for the products and services you offer.

The wrong commercial lease can leave you feeling trapped and, in more severe cases, liable for issues that could cost you your business.

These are some of the common pitfalls when signing a commercial lease.

Long-term lock

Whether you are making your first moves to expand your business or adding another location to an already-thriving company, your business needs to be able to adjust for the market.

Often, owners commit themselves to a long-term lease, thinking they will get a better deal. Unfortunately, they can end up with a long lease that keeps them stuck with little flexibility to change their business plan as there are changes in the market. Consider possibly a shorter term with one or more extension options.

When you are negotiating your lease, make sure you understand the lease’s value and what you truly need. A lease with extras that you will never use is not going to add value to your business. Take the time to negotiate with the landlord to have a lease (and a term) that works for you and your company.

Detrimental duties

Commercial landlords want to prepare for the worst if their property is destroyed. A landlord will ensure their revenue by including a clause in the lease that requires tenants to pay rent, even after the destruction of the commercial property.

It may seem unlikely that there will be a situation where the property is no longer usable, but this sort of requirement could be disastrous if you are stuck paying for a space you can no longer use. If the landlord insists on this provision, you may be able to insure against this possibility.