Everything You Need To Know About Commercial Leases
A business lease is a written agreement between the owner of rental premises and the business that occupies the property. Most investors will prefer to rent property as opposed to building their own because of the cost implication.
Popular Terms Used:
The term refers to the party granting the lease. This party, who is either the property owner or manager, has the legal obligations related to the contract.
The lessee is the tenant. Their business name should be in every document of the contract.
In this type of contract, the lessor agrees to pay for all expenses, including maintenance fees and utility bills. This agreement will be much more expensive because it incorporates all costs.
This contract will include property taxes, costs limited to the dimensions of the property, and all other ownership expenses.
What Is Included In A Business Lease?
Rent Amount And Annual Increases
The annual rent is based on square footage. Other costs such as property taxes and service charge may be included depending on the type of lease. The lessor will also state the annual percentage here for your records and reference.
Length Of Lease
The lease period could either be long term or short term. Most landlords prefer long-term leases, but new businesses are better off with short-term contracts.
Description and Use Clause
The lease will describe the property, expressing clearly which areas the lessee can access, as well as the use clause that defines the scope of the lessee’s activities.
Why You Need an Attorney
While you could negotiate a business lease on your own, attorneys at Licari, Walsh & Sklaver, LLC advice that you seek legal representation. The lessor bases the rent on the square footage of the building. Does that include the elevator and stairwell? In most cases, rent increase is based on an annual percentage. In some instances, this percentage increase fluctuates upwards, even though the services remain the same. A Connecticut business attorney will negotiate the spaces to be included when calculating the square footage and they will also insist on property taxes being the lessor’s cost. They will even negotiate the annual increases, prodding the lessor to make it a flat rate for a specified period.