Commercial Leases

When leasing a property for your business, you may either deal with a leasing agent who represents a wide variety of properties, or directly with the owner or property manager. Be sure to have your lawyer review any offer to lease agreement or lease agreement before you sign it.

The lease agreement will include such matters as the length of the lease, rental payments and common area charges. It should also disclose the items which are the financial responsibility of the landlord and those that are to be paid by the tenant. Maintenance services such as janitorial and landscaping are sometimes included in the rent. Hydro, gas, telephone and other utility expenses are usually not included. The landlord's property taxes, insurance costs, and costs of various repairs to the building may or may not be included.

A lease which includes all of the expenses of operating the premises in the monthly rental charge is referred to as a gross lease. When various expenses of operating the premises are added onto the basic monthly rent, this is called a net lease or net-net lease, depending on what additional charges are included or excluded from the basic rent. A triple-net lease is one in which the tenant agrees to pay for all of the utilities, maintenance costs, repairs, insurance and property taxes of the building in addition to the basic monthly rental charge. These additional expenses can be very substantial, so it is important to know exactly what you and the landlord will each be responsible for paying.

Be sure that the lease states who is responsible for renovations or upgrades to the leased premises. Often, any fixtures that you add become part of the building and are considered the property of the landlord once the lease is terminated. Don't be afraid to negotiate the best deal possible on a lease. If you lease for more than one year, or you are the major tenant in a building, or are leasing a large amount of space, you can often get a better deal.

Check local zoning by laws to ensure that you will be allowed to operate your business on the premises. Property and buildings are zoned by the type of business activity allowed, such as industrial, office, retail and medical-dental. Any property you consider should be zoned for your proposed use. In addition, you should ensure that the landlord does not have any restrictive covenants in his or her leases with any other tenants in the complex, which might prohibit you from competing with another tenant.

Before you enter into a lease agreement you should take into account all aspects of the building. Consider the location. Is it easily accessible for customers, employees and suppliers, including people with disabilities? Is there enough parking? Is there a loading dock for shipping and receiving? Is there room to expand if your business grows?

There are many reasons why leasing is an excellent option for most businesses. Do your homework, consult one of our lawyers who is experienced in commercial leasing, and negotiate the best deal possible.