Common Issues with Commercial Leases

January 10, 2016

When people consider leasing commercial spaces for their office or business needs, sometimes they do not consider the potential complications that can occur during the negotiation process. While not all commercial leases are complicated and may only require one or two points of negotiation, some may have several points to be discussed. That is why it is critical to contact a real estate attorney to help you through the process. The following are a few examples of common issues associated with commercial leases and how they can potentially impact your business.

Many tenants want the opportunity to sublease their building in case there are big changes in their business. Sometimes financial changes may require that the business take a step back from the space in order to save money, or if the business is doing well, the company may need to move to a different location. However, many landlords see subleasing as a potential risk because the person who subleases the space may not be financially responsible and this could mean a monetary loss for the landlord. This is certainly a situation in which give and take must be considered so that both parties are accepting of the terms of the lease.

This may be one of the most negotiated points of a commercial lease. For tenants who operate in an entire building, this is an easy answer-they simply take on all of the expenses. However, more commonly tenants are sharing an area and because of that it is critical that the amount the tenant is responsible for concerning operating expenses is clearly defined. These costs can add up quickly and can greatly impact the bottom line of any new business.

Another critical aspect of a commercial lease is the maintenance of the building. Sometimes tenants want more or less control of this depending on how they view their business. For example, some business owners want the freedom to make changes or repairs that will enhance their customer experience while other tenants do not want the financial obligation that comes with regular maintenance. This should be clearly defined so that when there is a need for repair it gets accomplished quickly and without any disagreements.

Typically, a focal point of any commercial lease is the use of the property. Some commercial real estate owners simply do not want certain businesses in their building. Sometimes this has to do with how well a certain business will mesh with existing businesses owners. It is critical that everybody understands which businesses are acceptable and which ones are not.

It can be difficult to negotiate a commercial real estate lease. For that, you should call Kristina Reed, an experienced attorney located in Sacramento. She is well-versed in commercial real estate and will help you through the lease negotiating phase of your business. Attorney Reed will make sure that you are making the best decisions for the future of your business.