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Commercial Lease

We frequently advise commercial landlords who’ve finally found a tenant willing to rent their commercial space, or a business tenant who’s finally found the perfect location for their business. When entering a commercial lease, the landlord is thinking about rent checks finally resuming and the tenant is thinking about how successful their business will be. However, the prudent landlord or tenant should think carefully about the eventual end of the lease. Included are questions we see most often that arise in a commercial lease dispute- an ounce of prevention here can be worth a pound of cure.

What can the Tenant take with them when they leave?

At the end of a lease, the Tenant is required to vacate the property and leave it in a certain condition. Generally, Tenants can take with them their personal property and trade fixtures.  However, the Lease can alter these rights, and should be carefully examined to ensure that the Tenant understands what they can take, and the Landlord knows what stays.

Can my Landlord rent to a competitor?

Unless a Tenant bargained for a non-competition restriction, a Landlord can rent to whomever he pleases. A Landlord’s decision to rent to a competitor can have serious financial consequences for an existing Tenant. A Landlord may be willing to forego these opportunities but will only be obligated to if it the parties have already come to an agreement. Lease negotiations are the perfect time to address this issue.

Who has the obligation to maintain the property?

A well drafted commercial lease will clearly assign obligations to the Tenant and Landlord concerning maintenance.  Leases that are vague or do not address these issues can leave the parties confused as to who must repair parking lots, air conditioning systems, or provide landscaping.  Because of the cost of these obligations, it is imperative that Landlords and Tenants understand these obligations, and clearly allocate them in the Lease.

If I make a mistake, can I make it right?

Believe it or not, Landlords and Tenants disagree from time to time.  A useful tool for both parties can be the obligation to provide notice of, and a right to cure a default.  Such a provision might require the party crying foul to put their claim in writing, and allow the other party the opportunity to fix the issue.

Commercial Leases lay the foundation for the entire relationship between a Landlord and Tenant- it is worth the time to read them carefully and consider whether they can live with those choices.  After all- a clever person solves a problem, a wise person avoids it altogether.

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