A lease can open the door to exciting new business opportunities, or it can lead to getting blindsided by unexpected expenses or liability, or to losing your business altogether.
Avoid leasing landmines on the road to business success. Consider these five key issues before signing a lease: Lease Term; Commencement; Condition of the Premises; Rent, Increases and Additional Costs; Right to Sublet or Assign.
Read MoreLeases on more than 265 million square feet of commercial space are set to expire in 2025 (Source: Trepp Report). This includes 100 million square feet of industrial space, 85.5 million square feet of office space, and 58.5 million square feet of retail space. For landlords, lenders, and investors, these lease expirations will likely impact cash flows and valuations differently depending on property type.
Read MoreVague terms in a commercial real estate contract can lead to a variety of legal issues. For example, if a lease agreement states that the tenant is responsible for "reasonable maintenance" of the property, this could lead to disagreements about what constitutes "reasonable" maintenance.
Read MoreContractual contingencies are essentially safety nets in a commercial lease agreement. They are specific conditions or events that must be satisfied by one party for the other party to be required to perform its obligations. If these conditions aren't met, as the tenant you may have the right to back out of the agreement without any adverse legal consequences. For instance, you might include a contingency that the lease term will only commence if you obtain a certain business license. If you fail to get the license, the contingency allows you to terminate the lease without penalty. In the context of getting your commercial lease deposit back, contractual contingencies are crucial. They can protect you from losing your deposit due to circumstances beyond your control.
Read MoreIt is more difficult for the seller to get out of a signed contract than the buyer because if the buyer has competent counsel, their lawyer will include provisions which allow the buyer to terminate the agreement under certain circumstances related to due diligence and financing.
Read More
