Renting commercial real estate is a major step in the growth of your business, and the details of your commercial lease could ultimately impact the success or failure of your business venture. There are three main types of leases that are typically used when renting commercial space. Commercial leases are almost always incredibly complex and involve intricate legal documents that should only be negotiated and reviewed by an expert in business and real estate law. It is essential to understand the terms of the lease agreement before signing anything.
Inspect The Property Thoroughly
Check the square footage to make sure it is what you are told. Check for things like structural damage, and water or mold damage. Sometimes the property may not be what it seems.
Make Sure Your Lease Is Not One-Sided
If you do not understand the terms of the lease agreement, remember doing a little research is key to signing the right business lease. Specifically, look at the building owner, landlord, zoning laws, environmental expectations, and nuisance laws. It is wise to have a real estate attorney along when you are signing the commercial lease as commercial leases are complicated.
Repairs And Maintenance
Make sure you have complete knowledge of your responsibilities under the lease agreement for the maintenance of the property. Generally, commercial leases require the lessee to be responsible for repairs.
Commercial Lease Law In Florida
Overall, this is what a lease agreement in Florida should always have to avoid future issues:
- A list of the people involved in the lease
- A detailed description of the property and its location address
- Terms for the lease
- The rental amount
- Security deposit explanation
- Policy for repairs, damages, and modifications to the property
- The corresponding obligation of each party in the lease
- The defaults, rights, and remedies under the lease
- Responsibility for paying property taxes and insurance should be outlined
A valid and enforceable lease should be in writing and signed by both the landlord and the tenant. Be sure and have your real estate attorney review and negotiate the terms of the agreement before signing to ensure all is required.
Commercial Lease Types In Florida
Commercial leases are different from residential leases. Your lease could have numerous terms and stipulations. Understanding what the various commercial lease types entail is important. An attorney will ensure you know what you’re signing.
The three most common types of commercial leases are:
- Gross Lease: With a gross commercial lease, tenants make a single payment to their landlord. Rent is paid to both occupy the space and cover some other property expenses associated with the unit. The landlord is responsible for property taxes, insurance, and maintenance. This type of commercial lease is most common in office buildings and retail complexes with multiple tenants.
- Modified Gross Lease: A modified gross lease is a type of real estate rental agreement where the tenant pays base rent at the lease’s inception but agrees to pay a proportional share of some of the other costs associated with the property for instance the landscaping. The lessee will pay for the landscaping and the landlords would be responsible for property taxes, utilities, insurance, and maintenance.
- Triple Net Lease: The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Since the tenant is absorbing at least some of the taxes, insurance, and maintenance expenses, a triple net lease features a lower monthly rent than a gross lease agreement. This type of lease is generally for industrial or retail properties but can also be used in other commercial sectors.
When signing a commercial lease agreement, you must understand which type of lease you agree to.
A commercial lease can contain virtually any other term that both the landlord and tenant agree to. Generally, anything included in a commercial lease is enforceable unless it is illegal, or the term is too vague for a court to enforce. Whether you are signing your first lease or getting ready for a move or a renewal, you need to have a thorough understanding of commercial leases. Unlike residential leases, commercial leases are very much “buyer beware.” Your rights are exactly as stated in the lease with little to no other protections. It is always advisable to have a real estate attorney with you when signing your lease.
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About Estevez Law Group, P.A.
Helping clients with real estate, commercial real estate transactions, residential property purchases and sales, estate planning, and more! Skillful legal representation can simplify complex real estate transactions and solve problems that frustrate all parties involved. At the Estevez Law Group, P.A. our boutique real estate law firm and title agency assists clients with all types of residential and commercial property matters.
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