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Making sure a lease satisfies business needs

May 22, 2020
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Dear Mr. Feichthaler:

I am thinking of starting a business (great timing, right?) and need to rent commercial retail space. Is there anything I need to look out for?

-Steven R.

Dear Steven,

This is a frequent question, as many of our entrepreneurs are expert at their business, but may not have entered into a commercial lease in the past. As with any agreement, you will want to ensure the terms of the lease are as favorable to you as possible. First, the dates of the lease are set. If you need to have the ability to renew the lease, an option to renew should be included so you can continue your business without interruption. Typically, the extension will come with an agreed-upon increase in rent.

The more subtle, but just as important, issues to look for are other costs. Will you be responsible for Common Area Maintenance (CAM), or even a portion of the real estate taxes? Sales tax will be payable as well, confirm who is responsible for those amounts? Careful attention should be paid to every clause and term in a proposed lease.

Another significant issue that arises is who is responsible for major repairs, particularly the HVAC system. You could have significant liability if the burden is on you to potentially replace expensive air conditioning equipment.

Finally, if you have a lease with option to purchase, you may want to require the landlord to record a Memorandum of Lease with the Lee County Clerk. If not, nobody will know that you have the potential contractual right to purchase the property, and another buyer could come in and purchase without your knowledge.

There are many other issues that require attention to ensure you have a lease that satisfies your business needs, while protecting you financially. Most importantly, best of luck with this endeavor! I am rooting for you and all of our local businesses as we emerge from the business closures burdening our community since March.

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

 
 
 

 

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