Nashville Commercial Lease Agreement Attorney
Signing a lease on a commercial building is a large investment of time, money, and faith. The success or failure of your business may actually hinge on the particulars of your lease. Understanding the specifics of commercial leases, as well as how they differ from traditional residential leases, is essential before approaching a potential landlord and signing on that dotted line.
What’s The Difference Between and Commercial and Residential Lease?
Although both leases are regulated by certain statutes, commercial leases and residential ones are actually quite different. Some of these distinctions include:
- Less consumer protection. Unlike residential leases, there are no caps on security deposits or other rules that govern the amount of privacy a tenant can have.
- No boilerplate forms. Anyone can go online and download a standard residential release form for a nominal fee. Every commercial real estate agreement is completely unique, so you’ll want an attorney to review it for you.
- Longer term length and less flexibility. Unlike residential ones, commercial leases are not easy to break and are often for a 7-10-year term. Due to these factors, a large investment is at stake. Because of these terms, however, you may have more negotiating power. If you’re in need of a specialized space or features, you may be able to negotiate the terms of your lease with the help of a skilled attorney.
How Do I Know a Commercial Lease Will Meet My Business Needs?
Before signing a lengthy lease agreement, take steps to make sure it will meet all of your unique business needs. The most important consideration is rent – make sure you’ll be able to afford it for the entire lease term. If possible, negotiate a short term lease with multiple renewals; you never know when your business will outgrow it or if the location will stop working out for you.
Physical considerations should be your next concern: does your business require certain modifications to make it suitable for your needs? For example, do you need to add cubicles or a counter? If so, make sure either you or the landlord can make the desired changes.
Even smaller concerns in the lease can make or break your business plan. For example, make sure your lease allows you to set up a sign that’s visible from the street to drum up walk-in business. Conversely, if you want to be the only specialty store on the block, make sure your landlord isn’t going to rent out other spaces to competitors.
Commercial Lease Essentials
Though each lease is unique, most have the following tenets:
- A lease term, which stipulates how long the contract lasts, when it begins, and the renewal options.
- The rent amount, which can include the number of allowable increases, as well as the conditions of escalations.
- What other items are your responsibilities, such as insurance, utilities, property taxes, and maintenance costs.
- The security deposit amount, as well as conditions surrounding its return.
- The exact specifications of the space you’re renting, for example, the common areas of the complex aren’t included in the lease.
- Whether there will be modifications to the property for the lease term, as well as who is responsible for these changes.
- Sign specifications and rules.
- Whether or not you have the option to sublease.
- Parameters for disputes, for example, whether you’ll pursue mediation or arbitration as an alternative to court.
- How the lease may be terminated early, including notices and penalties.
We strongly suggest reviewing your commercial lease agreement with an attorney before you sign. If you have any questions or concerns regarding commercial leases, find a skilled team of attorneys. Please contact us for help with commercial lease agreements.