Commercial Leases 101
Commercial leases are often very different than leases used for residential property. Compared to residential landlord-tenant law, which comes with a myriad of rules and regulations on almost every part of the rental process, commercial landlord-tenant law allows parties much more leeway in setting the terms of the relationship.
Here, I’ll discuss some points to keep in mind when reviewing a commercial lease.
Commercial Property is Often Rented “As Is”
Commercial property, unlike residential property, is often rented “as is.” This means that the tenant takes the property in the condition it is offered and assumes liability for all maintenance and repairs for the duration of the tenancy.
This is quite different than residential property, which comes with an implied warranty of habitability and compliance with the state sanitary code. Commercial property does not have to comply with these requirements.
Waiver of Many Tenant Rights
In a commercial lease, a landlord can (and often does) require a tenant to waive many rights related to the property. For example, a tenant can be asked to waive their right to a jury trial if a court case among the parties ever develops. It is also common for many commercial leases to require tenants to pay legal fees if a dispute among the parties ever arises.
As most commercial leases are often drafted in the landlord’s favor, it is a good idea for tenants to obtain an attorney before agreeing to any such terms.
Liability for Most Property Expenses
Commercial leases generally require tenants to assume payment on all of the property expenses. While residential leases require tenants to generally pay monthly rent and assume some of the utilies, commercial leases often require tenants to also pay property taxes, insurance, and other operating expenses.
Commercial leases can be complicated and confusing. For this reason, it is a good idea to seek legal representation anytime you are involved in such a matter. If you need assistance with such a case, contact me for a consultation.