Whether you are a landlord hoping to lease your property or you are a business owner looking for the ideal commercial property, the terms of real estate contracts are important. For commercial properties, it is most common to have a lease agreement in place in order to protect the interests of both parties and outline the terms of the relationship. The details of these contracts are critical and can affect the long-term health of your business or your financial well-being.
It is in your interests to know what should be in a commercial lease agreement. Even a small issue in the terms of this contract can lead to complications for both parties, and it is beneficial to pay close attention before you sign on the dotted line. Whether you are reviewing a contract as a business owner or presenting a premade contract as a landlord, paying attention to the details can save you time, money and a significant amount of stress.
The details of a contract
Like any other type of business contract, you should carefully review a commercial lease before signing it. Some landlords prefer to use a premade, standard contract, but it is important to negotiate and include terms that are specific and important for the individual situation. Important terms in any commercial lease include:
- Rent — This includes the amount of the rent, the potential for rent increases in the future, what the rent amount includes and more.
- Term of the lease — This includes the length of the time that the lease contract is valid, as well as options for renewal and penalties for early termination.
- Property condition — A lease should include details regarding which party is responsible for repairs and remodeling, who pays for utilities and more.
- Use of space — The commercial lease should clearly spell out how one can use the property, parking details for visitors to the property, property boundaries and more.
With a detailed lease, there will be a lower chance of issues that could arise that could cause complications between the two parties. As there are major legal and financial issues at stake, it is beneficial to have professional guidance when reviewing these types of contracts or drafting a commercial lease agreement. An assessment of the specific lease can determine whether additional terms are necessary or changes should be made before entering into a legally binding agreement.