Q: I am going to open a new business and plan to lease property in a commercial building. I have never rented commercial property before and could use a few pointers. The landlord with whom I am negotiating says he has a "standard" lease. Is there really one lease for everyone? Shouldn't I ask some questions?
A: It is true that there are standards for leases and that some leases could be considered standardized. There is, however, no "standard" lease. I imagine that the lease prepared by the landlord has standard provisions but you will want to address each of these from your unique perspective.
The lease certainly addresses rent, length of lease, renewal options, payment terms, description and boundaries of the space being leased. In addition to these basics, consider reviewing the following questions and if any one is not addressed in the lease and is an important consideration for you, speak with the landlord about including it.
What are your cancellation rights? What are his? Is there a security deposit and what are the terms and conditions for having your deposit returned to you at the end of the lease? Is there a provision that permits the landlord to enter your premises to inspect, maintain or to show the property at the end of your lease should you decide not to renew? Who is responsible to repair and maintain the fixtures, appliances and equipment such as the air conditioning system that may be shared by other tenants? Do you have a right to sublease the space if you decide during the term of the lease that you no longer need or want it? Are there restrictions as to whom you should sublease to, for example, a provision that you can't rent to a restaurant because there is another restaurant in the building or center? Are there any insurance considerations such as minimum coverage requirements for you? Are you being asked to list the property owner as a beneficiary on any of your policies? What are the provisions should the property be destroyed for any reason, including fire, storm or act of terrorism? Is what constituents "destroyed" clear? If the property floods and mold ensues, is the property "destroyed?" Is it possible for you to rent the adjacent space should it become available? Could the terms of that agreement be pre-arranged so that you are not at a disadvantageous position because the landlord knows you really need the space in the future? Are there any restrictions as to what products or services you can offer? Does the lease require that you remain open during certain days of the week, or hours of the day? If the rent includes the payment of a percentage of sales, is how that is to be calculated or reported clear?
It is clear that there are many factors to consider. You may want to seek the help of an attorney who is familiar with the drafting of commercial leases before even beginning to negotiate a commercial lease.
Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., Cape Coral.
This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.