Legal Services for Business: Leases
Commercial leases are complex contracts that need to be reviewed by a lawyer familiar with commercial leasing issues. Don’t wait until after an offer to lease has been signed to contact your lawyer; the offer is a binding legal agreement and its provisions will limit your ability to negotiate the terms of the actual lease so it should be reviewed by your lawyer before you sign it. Provisions of both the offer and the lease that must be examined closely include those obligating your business to pay the expenses of operating the building (taxes, utilities, insurance, maintenance etc.) and those setting out the respective repair obligations of the Landlord and the Tenant. Operating expense costs often exceed base rent in commercial leases. The lease may also provide for high security deposits, rights on the part of the Landlord to terminate the lease on short notice in order to demolish or substantially renovate the building and other provisions that can be very costly for the Tenant or that can substantially reduce the value of the lease. Having your offer and the lease reviewed by your lawyer before you sign them and negotiating some reasonable changes can save you a substantial amount of money over the term of your lease.