Lease Review and Negotiation

Commercial real estate refers to any property that is used for business purposes.  This can include office buildings, industrial properties or retail properties. In most cases, a commercial building is owned by an individual or a company that leases the property to business owners. Because commercial leases accommodate a wide variety of businesses, terms vary significantly from lease to lease. To secure the most favorable terms, it is important to have a real estate attorney review and assist in the negotiation and review of your commercial lease before signing the document.

Many issues are addressed in a commercial real estate lease, including:

  • Lease term
  • Rent and potential for escalations
  • Security deposit
  • Common areas
  • Passthrough expenses
  • Ability to modify the property
  • Restrictions for signs (style, size, placement)
  • Maintenance and repair responsibilities
  • Rules for sublets
  • Notice requirements for termination
  • Penalty for early termination
  • Method of dispute resolution

Understand the Terms before Signing a Commercial Lease

Because commercial real estate leases do not offer the same consumer protections that are provided in most residential lease agreements, it is prudent to have a lawyer review the agreement prior to signing. Commercial lease agreements are often complex and written in terms most favorable to the landlord. Unlike residential leases, commercial lease agreements do not provide much protection to either party.

Under commercial real estate law, it is assumed that the parties are equally sophisticated and have equal bargaining power and are thus able to set the terms of the lease in a professional business setting. However, the standard lease agreements used by many commercial landlords contain terms that are highly unfavorable to the tenants. Unfavorable terms in a commercial lease can have long-lasting implications for you and your business. Before signing a commercial lease, consult with a real estate attorney to learn about your rights. Enlisting the support of an experienced lawyer will save you time and money in the long run.

Commercial Leases are Almost Always Negotiable

Commercial lease terms are extremely important for businesses and are almost always negotiable. For example, if the success of your business is tied to a visible, high-traffic area, it might be in your best interest to negotiate a longer lease term with an option to renew for a longer period of time. If you expect to expand your operations and thus increase space in the future, you might negotiate an option to sublease a portion of the property. You can then lease a space that is larger than you initially require, but can recoup some of your costs by subleasing office space to another business until you need the additional space.  There are numerous options and differing ways to approach a commercial lease and, at the Conejo Valley Law Group, we can explain those options to you and assist you in the attaining the option that works best for you and your business.

Contact the Conejo Valley Law Group

An experienced commercial real estate attorney at the Conejo Valley Law Group can review and negotiate your commercial lease agreement and other transactional documents related to the leasing process. Contact the Conejo Valley Law Group today to schedule a consultation.