What Should Your Commercial Lease Include?

May 30, 2012

California small business owners routinely sign their commercial leases without any legal guidance. However, any Sacramento small business attorney would strongly caution against it. The modern small business lease, depending on the space to be leased, may include a host of complicating factors you may not encounter in a typical residential lease.

Spell it out

Your leased space is your business’s most important asset. It connects your products and services with your potential customers. What many business tenants fail to think about, however, is what the lease includes beyond the actual square footage to be leased.

For example, a business owner will want to be exceptionally clear about their retail space’s access to things like common walkways, parking, and utility services. Additionally, a business owner may want to be clear about his or her right to post advertisements for the business in the common areas of a retail center. Whatever the circumstances, it is imperative for the lease to provide an accurate and detailed description of the property to be leased, including the condition of the structure and anything within the structure that is to be included with the space.

In addition to the physical and artificial boundaries, you will want to be clear about your business’s responsibility for utilities like phone, internet, electricity, and water. In some cases, business owners mistakenly agree to take on responsibility for certain maintenance, insurance costs, and property taxes. A California small business lawyer can make sure the language accurately reflects your understanding and expectations for the property, and can protect your rights against an over-imposing landlord.

Think Beyond the Space

Renting business space differs from renting residential space primarily because business space is designed to invite members of the public onto the premises. As a result of this public access, a number of federal regulations can apply to your ability to use the space to conduct business. For example, the Americans With Disabilities Acts (ADA) prescribes certain standards for access to retail environments for those with impaired mobility. If the lease is not specific as to the landlord’s responsibility for the cost of ADA compliance measures, your business could be on the hook for those costs. Failure to comply may restrict the free operation of your business or halt all business operations entirely until compliance is achieved.

Also, your business may want to negotiate with the landlord for additional rights and protections. For example, if your business is to open its doors in a strip mall or shopping center, you may want to negotiate a provision in which the landlord promises not to rent any other nearby space to a competitor of yours.

Finally, you will want to ensure that the zoning regulations that attach to the leased property will not interfere with your business practices. If the property is not already zoned for your brand of business, you will want the lease to include provisions about who is responsible for the cost and effort of obtaining the proper zoning licenses.

The world of commercial leasing can be difficult to navigate. A Sacramento commercial real estate attorney can help a business owner protect his or her rights by negotiating and drafting a lease that is fair to both your business and your landlord.

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