Whether you are going into business or want to rent a property to tenants, you are going to have to enter a lease agreement. Commercial lease agreements are necessary whenever you intend to rent a property for commercial or industrial use, or when you want to fill your commercial space, warehouse or office space with paying tenants. No matter which side of the equation you are on, there are qualities to commercial property lease agreements you will need to know before you enter one. Even if you are just looking for a simple lease of some office space or buying a property to lease it as commercial property, be ready before you take that step. Here is what you need to know:
- WHAT IS A COMMERCIAL LEASE? Just like any other lease, be it for a car, flat or home, commercial property leases allow landlords and tenants to enter an agreement where the tenant can use the space and pay the landlord rent for that privilege. The difference is commercial properties are for business purposes. No matter if it is a dentist’s office, a factory or a store, if you want to use a space for commerce purposes, you’ll have to enter a commercial lease.
- WHEN CAN I USE A COMMERCIAL LEASE? If you want to rent a property out for commercial purposes, or if you want to rent such a space, you’ll need a commercial lease. Because commercial endeavours usually see much higher traffic (customers, deliveries, employees.) These leases are to regulate the property and the special conditions that arise in commercial spaces. Commercial leases are distinctly different from residential leases, and you need to be aware of this.
- WHAT MAKES A COMMERCIAL LEASE DIFFERENT FROM A RESIDENTIAL LEASE? Commercial properties are intended to be used as business spaces. No matter if it’s a convenience store, a tailor shop or a factory, all of them place special demands on the owner and the tenant. Commercial leases typically have special clauses stating what activities can go on, who is permitted on the site, safety and security concerns, privacy rights and landlord access rights, as well as other business-specific clauses. Even office space leases will typically have many such clauses and conditions.
- WHAT NEEDS TO BE STATED IN THE LEASE? There is a lot that needs to go into any lease for a commercial property. Since it will hold a business, Commercial Leases often last for many years at a time. They also need to explicitly state the terms of liability, renewal, assignment rights and other issues. Commercial leases are typically much longer than residential leases, and their individual clauses are designed to meet the needs of the businesses that plan to operate on the property.
Business may be complicated. If you want to rent office space or store-front space, you need to be sure your lease gives you enough latitude so you can run your business your way. But also enough security to make sure you can’t be kicked out at will. If you are a landowner, you want to make sure you protect your property and not compromise its value by renting to a party that will cause you problems. Either way, knowing how to make a complete Commercial Property Lease is essential.
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