A commercial lease is a contract for a company to lease office space or other commercial property from an owner. The term «commercial» simply means that the lease is for commercial activities and not for the construction of housing. A commercial tenant can be anyone, from an individual entrepreneur with a growing small business to a large multinational. At the end of the 5-year period, the lessor can renegotiate the contract taking into account the improvements made, unless there is a prior agreement. But the rent increase will not exceed 20%. In a commercial lease agreement, the owner is usually responsible for routine maintenance work such as COC repairs or exterior work. However, the tenancy agreement may delegate all or part of this responsibility to the tenant. While the basic concepts and conditions of a commercial lease are similar to a rental agreement you might have signed for an apartment, there are always differences between commercial and residential rents that you must meet. Residential rents are often highly regulated with certain conditions that cannot be changed by law, even if both parties agree to waive these conditions. On the other hand, commercial leases have virtually no restrictions beyond the fundamental right of contracts.
If the business has problems or has to move to another area, the tenant may consider terminating the lease. In this case, the landlord may have the right to sue the tenant on the remainder of the rent to be paid on the tenancy agreement. In some states, landlords may have a duty to mitigate the fact that they are trying to re-rent space and compensate for the rent they receive against the damage the tenant owes. If both parties agree to the terms of the MOU, we will develop the lease and present it to both parties for review. We audit the document to ensure clarity and fairness. Upon acceptance, both parties sign the lease. A rental deposit is required before the lease begins. A two-month deposit is also required.
This will be refunded at the end of the lease, provided the property is restored to good condition, with fair wear supplements. Whether you`re signing your first lease or preparing to move or extend, you need to have a thorough understanding of commercial leases. Unlike residential rentals, commercial rentals are very «caring buyers». Their rights are exactly stated in the rental agreement, with little or no protection.