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What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a contract between a landlord and a business for the rental of property. Most businesses will choose to rent property instead of buying it because it requires less capital.

What should you pay special attention to in a commercial lease?

Here are 6 of the many clauses to be aware of before entering into a commercial lease:

• Renewal Clause - Most leases are for 1+ years. Renewal may be automatic or optional and under the same or similar terms and conditions.
• Acceleration Clause - An acceleration clause provides the landlord with the right to demand the entire balance of the unpaid rent for the remainder of the term.
• Rent and Rent Increases - Many commercial leases will provide for a ‘base rent’ and ‘additional rent’. Be sure to calculate the total amount of rent when determining whether the lease is right for you.
• Utilities Payments - Utilities may be included in the rent but take caution. If you are listed as a utility account holder, then you’ll be liable for those payments.
• Sublease & Assignment - In a sublease, a subtenant would rent a portion of the property or even the entire property from you for a short period of time. A new agreement would be drafted between you and the subtenant, but you are still responsible for all obligations to the landlord.
• Common Elements - Not all common elements are “common”. For example, the landlord or other tenants may have exclusive possession or use of a common element, such as a parking spot. Be aware of your responsibilities for garbage and snow removal as well.

Sources: https://smallbusiness.findlaw.com/business-operations/commercial-lease-agreement-overview.html, https://blog.clausehound.com/what-should-i-look-for-in-a-commercial-lease/