What is a Commercial Lease Agreement?
Commercial lease agreements are legal contracts between a business and a landlord, governing the terms under which a commercial premises may be leased. From office spaces to retail stores and restaurants, commercial leases set out the rights and responsibilities of both the business tenant and the landlord. In many jurisdictions, including Pennsylvania, commercial leases differ from residential leases and are exempt from consumer protection statutes. There is no one "standard" commercial lease agreement as it varies significantly depending on the specific premises, the type of business, and the agreement between the landlord and tenant.
However, there are several basic components that are common to commercial lease agreements. Typically a commercial lease will specify who bears the responsibility for repairs inside a building and whether alterations and repairs require the landlord’s consent. The agreement will also state whether rent includes utilities, phone, cable, or other services, whether taxes will be levied on the tenant, and how payment of funds will be handled. The lease will almost certainly include provisions regarding subleasing, assignment , and the duration of tenancy for the commercial property. Other typical provisions in commercial leases include whether the premises can be used for the sale of illegal substances, whether you can sell alcohol, permit fires or explosions, and whether you can conduct mining or drilling operations. Further, the lease will typically state whether the premises has smoke detectors or fire alarms and whether the landlord must maintain these. Other items to be mindful of are restrictions on employee parking, the hours of operation for the premises, and advertising on the premises. The lease will also contain an inventory of the furniture and appliances on the premises, and whether appliances without repair can be replaced by the tenant without consent.
Negotiating a commercial lease without the assistance of an experienced business lawyer is dangerous to you and your business. A Pennsylvania commercial lease agreement attorney at MacMain Lee will review and help you understand every provision outlined in your commercial lease agreement. We will negotiate with your landlord to ensure that you fully understand and agree with each and every term of the agreement. We will draft provisions for you that are in your best interest, based on your industry and the nature of your business.
Why You Need a Lawyer to Review Your Commercial Lease
Finding the Right Commercial Lease Agreement Lawyer Near You
A commercial lease agreement is a complicated contract, full of legal jargon, legal obligations, and other terms that can be misconstrued or misinterpreted if you’re not careful. The best way you can protect yourself against legal pitfalls when it comes to your complex lease agreement is to hire the right lawyer to help you throughout this process. Even the briefest of misunderstandings can lead to costly and time-consuming negotiations between tenant and landlord. It extends beyond just reading and understanding the agreement, too—you need to force your landlord to agree to amendments and changes that make sense for your unique situation.
Even if you think you’ve found the perfect commercial lease agreement for your business, the truth is that there’s still long way to go. Because of how much money can be tied up in an error you might make when it comes to your commercial lease, securing an experienced, reliable lawyer to help you through the process is a necessary expense. They’ll write your lease so it fits in with your current needs and is also flexible for future expansion while protecting yourself and your company from bad faith offers and penalties. An experienced lawyer knows what sort of language should be used in these contracts, and might even know, based on experience, what landlords and property management companies normally request and allow.
Consider taking a little extra time and researching potential lawyers before you hire them to draft your commercial lease agreement. Speak to previous clients, ask about their experience with the lawyer, and see what they have to say about the final results. You could also ask for a portfolio of written contracts and complicated documents to further ascertain the lawyer’s capabilities.
While hiring a commercial lease agreement lawyer may cost more than attempting to go through the process yourself, the investment is well worth it in order to secure yourself against damage to your bottom line if something goes awry during the leasing process. The straightforward costs are nothing compared to the fees and expenses of coming to a resolution to any mistakes that may be made during the drafting process.
How to Locate a Commercial Lease Lawyer in Your Area
Utilizing various resources can help you find the right commercial lease agreement lawyer for your client. Referrals can be obtained, as well as other online resources and directories that detail a particular lawyer’s background, experience, and practice areas. We provide a brief overview on how and where you can find a commercial lease lawyer near you.
Your own network can yield commercial lease lawyers. You likely have friends and acquaintances, clients, and know people who work at other law firms and organizations, like corporations, banks, and governmental entities. Ask around to see if someone you know can recommend a commercial lease lawyer that specializes in the area you need assistance with. The American Bar Association (ABA) has a large database that can also promote referrals. Even your own lawyer is a great place to start. Contact him or her and ask if he or she can recommend a similar lawyer in your area.
Online directories are another great way to find a commercial lease lawyer near you. These directories typically lay out a lawyer’s practice areas, experience, and education (among other things), so that you can select an expert in the particular area you need assistance with. Sources like the American Bar Association, FindLaw, Martindale-Hubbell, and Avvo are all online sources that provide information to help you select the lawyer best for you.
Commercial Lease Lawyer Questions
What should you ask every prospective lease lawyer before hiring him or her?
1. What is your experience in this field?
Even if a lawyer attended a good law school, he or she may be new to the practice of law or commercial leases. Will this attorney be able to give you, the business owner, the full benefit of a long career in commercial real estate law? Make sure to ask your lease lawyer how many years of experience in this field he or she has had. Find out if they have worked with business owners and if they have experience negotiating commercial leases.
2. Can you get good terms for my commercial lease?
You want a lawyer who knows the common terms of commercial leases , and understands what property owners and realty companies expect from business owners. But you also want to know that your lawyer will take their time with the lease so that you can avoid any trouble later. Ask the prospective attorney if they can get you a lease that reduces costs and avoids problems.
3. Can you negotiate with my landlord if needed?
A business owner needs a lawyer who is willing to negotiate fairly. You may have problems with the terms of a lease or with areas you think are outrageous. Ask your lease lawyer if he or she is willing to speak to your landlord and advise them on fair terms. You want a lawyer who will care about your business and make every effort to ensure your peace of mind.
4. What are your fees and how do you bill?
You need to understand what the lease lawyer will charge. Some lawyers charge by the hour while others charge a flat fee. You should get a good idea of how much this lawyer will cost you over the course of your relationship. Can you afford this person’s rates? It is also important to understand how the lawyer will bill you. Ask how long it usually takes for billing and how that payment is expected.
5. Are you ready to work on this matter?
You want a lawyer who is always available when you need him or her. Ask your prospective lawyer if he or she has time to work on your lease agreement immediately, or if they are busy with other matters.
Costs of Hiring a Lease Lawyer
The fees associated with hiring a commercial lease attorney can depend on various factors, including the location of your business, the amount of experience the lawyer has, and the scope of the service they provide.
In most cases, your lawyer will offer up an array of service options. It may be on a pay-per-service basis or as one packaged price. For example, a lawyer may be able to negotiate the terms of a lease on a pay-per-service basis. Or the lawyer may perform a lease review for a flat fee based upon one or two hourly billable rates.
Some law firms have flexible payment terms, allowing you to modify a payment plan if you’re having trouble paying in full all at once. If you’re wary about current costs of a particular law firm, pay attention to their reputation and experience in commercial lease agreements, as this may make a big difference in the amount of money you end up spending in the long run.
The Lawyer’s Role in Negotiating a Lease
A commercial lease agreement lawyer will negotiate on your behalf throughout the process. He or she will handle the drafting of any terms of the lease that need to be added or modified before you sign. Drafting a clause, for example, requires a nuanced understanding of what should and should not be included based on the circumstances at hand. For example, if the space has been damaged in the past or is vulnerable to flooding, the lawyer may advise you to include a clause that ensures the landlord is responsible for making any necessary improvements to reduce the risk of damage.
In addition to drafting new clauses , a commercial lease agreement lawyer will be able to identify whether or not certain tenant or landlord responsibilities are fairly divided in a lease, or if one party is on the hook for too many obligations. It’s important to ensure that you are not responsible for unnecessary costs or repairs that you should not be responsible for under general law. For example, if you are leasing a retail space in a shopping center, you should not be responsible for repairing the roof of the entire structure—it should be the responsibility of the property owner, or at the very least shared among all tenants that occupy the building.