EXPERIENCE | SERVICE | RESULTS

Negotiating a commercial lease agreement

| Jul 15, 2020 | Uncategorized |

Residential leases in Mississippi and around the country are generally take-it-or-leave-it propositions, and prospective tenants must either accept the terms on offer or look elsewhere. However, the provisions of commercial lease agreements are usually negotiated. This means that business owners or their authorized representatives would be wise to research their choices carefully before signing documents that will tie them to a piece of commercial real estate for five or 10 years.

Due diligence is important because the courts tend to view commercial leases as agreements entered into by business people. This means that commercial tenants tend to be treated less sympathetically when legal disputes are litigated. Commercial leases are also far more complex than residential rental agreements. Individuals who rent apartments or homes usually pay a set amount of rent and then cover their own utility bills. The rent paid to commercial landlords may or may not cover property taxes and building maintenance or improvements and repairs and is, sometimes, based on the amount of revenue or profit the tenant business generates.

Other factors that business tenants should consider include local zoning regulations and traffic laws that may prohibit certain types of business activity or restrict access to commercial vehicles. These rules are usually put into place to prevent residential areas from becoming commercialized. They should also scrutinize lease contracts carefully and pay particular attention to the costs involved in terminating the agreement early.

Attorneys with experience in real estate law may be able to draft commercial lease agreements that allow tenant businesses to grow and thrive while providing landlords with a secure revenue stream. Attorneys could also seek to avoid future legal disputes and lawsuits by ensuring that both landlords and tenants fully understand their rights and responsibilities regarding such issues as common area maintenance, capital expenditures and sublet restrictions.