Commercial leases are part of the foundation of your business. They determine where you conduct your business, under what conditions the space is available to you and for how long and how much, and what you and the landlord are each responsible for. It is extremely important that you understand exactly what the lease contains for two reasons: (1) you will be responsible for following the terms and conditions, and (2) you want to ensure that the lease will support your business goals. Most commercial leases bind the tenant to the space for five years or longer – being stuck in an unfavorable lease for that length of time could be detrimental to your business.
There are many commercially available lease forms that lay out standard conditions, and many cover similar issues. However, a lease is a binding contract, and each situation and negotiation is different. There are various practices that are common in certain industries, certain space types and certain local regions. For example, a lease for retail space in a shopping mall will be much different than along a main street of storefront shops. A lease for a space in New York City will be much different than a space in Buffalo. A gas station lease will be different than a lease for a medical office.
For these reasons, it is best that you consult an attorney to review a lease before you sign it and help you negotiate favorable terms and conditions that should be added or changed to clarify points and to modify the lease to fit your business model. Your attorney can and should explain what the lease clauses mean and ensure that you are getting what you think (and what you need) in the lease.
Written By:Tracy Jong