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What is a commercial lease?

On Behalf of | Feb 4, 2019 | Contract Disputes

As a new Florida business owner, you obviously need a location from which to operate your business. This, in turn, means that you will soon find yourself deep into commercial lease negotiations. If you have never before had to deal with a commercial lease, you should know ahead of time that it presents you with many more negotiation opportunities than the residential leases with which you likely are much more familiar.

FindLaw explains that a commercial lease can, and should, be tailored to your business needs and those of your potential landlord. Commercial leases differ from residential leases in other ways as well, including the following:

  • They contain fewer legal protections for either party since the law presumes that business people have greater lease knowledge than residential renters
  • They contain numerous terms, most of which are negotiable.
  • Their lease length normally lasts for a period of years instead of the single year term of most residential leases.

Common negotiable terms

While virtually any provision of a commercial lease can be negotiated, you likely will negotiate the following:

  • Your lease period
  • The amount of rent you will pay and the amount (generally a percentage) of any annual rent increase
  • The amount of your security deposit and under what conditions you will get it back at the end of your lease period
  • Who will make and/or pay for any property improvements during your lease period
  • What, if any, use restrictions your landlord will impose upon you, such as for signage, etc.
  • How any subleases can occur during your lease period

As with any business contract you sign, make sure you know exactly what you are agreeing to in a commercial lease before you sign it. This is general educational information and not intended as legal advice.