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3 important issues to address in any Florida commercial lease

On Behalf of | Jun 26, 2024 | Commercial Real Estate |

Regardless of the type of space that an organization requires, leasing is often more affordable and expedient than purchasing a commercial property outright. Landlords with commercial spaces and real estate professionals representing them often want to get new business tenants into a space as quickly as possible.

Before they do, they may need to review and customize the terms of the lease. Specific concerns, including the following, often require careful negotiations before finalizing a commercial lease.

Maintenance responsibility and costs

Depending on the type of unit that attendance requires, there are many different ways to handle facility maintenance. In some cases, such as a tenant renting one retail unit in a strip mall or one office in a multi-business facility, the landlord may assume responsibility for most maintenance. In return for taking care of the parking lot and managing security matters, the landlord charges the tenant for maintenance. Common area maintenance (CAM) fees are one way to pass those expenses on to tenants. Other times, landlords include terms in their leases that make the tenant responsible for the maintenance of the unit and any of its equipment or systems.

How the tenant can utilize the space

Appropriate restrictions are crucial in any lease. Residential landlords often worry about pets and tenants bringing in roommates who aren’t disclosed on lease paperwork. In commercial spaces, the concern may be about the volume of traffic coming in and out of a rented space or the type of business the organization conducts. Imposing very clear limitations on the use of and access to the space can protect a landlord from a scenario in which their property might be at risk because of a tenant’s inappropriate or illegal conduct.

What happens if the tenant needs to leave early

Commercial leases are typically multi-year agreements. A landlord expects a tenant to remain in the unit or at least pay rent for the duration of the lease. However, the business might fail, forcing the tenant to vacate the premises ahead of time. Other times, the business might expand, making a move to larger facilities the best option.

There are many ways to address a tenant’s early departure in a lease. Landlords can include terms that hold their tenants accountable for all rent even if the business closes because it fails. They can also include terms that allow tenants to assign the lease to another party. Force majeure clauses could allow either the landlord or the tenant to terminate the arrangements due to factors outside of their control.

Real estate professionals and commercial landlords often need assistance negotiating and reviewing commercial leases. Integrating the right terms into a lease can help minimize the risk of tenant lawsuits or other major losses for commercial landlords.