What restrictive terms might occur in a commercial lease?

What restrictive terms might occur in a commercial lease?

On Behalf of | Jul 23, 2021 | Commercial Real Estate |

Commercial leases are much different than residential leases because of the nature of the industry. The leases that businesses sign are often much more comprehensive than leases for homes. There are several things that you need to check if you’re considering a commercial lease. 

One thing that you might realize is that the commercial lease contains restrictive clauses. These terms can negatively impact some businesses, so be sure you think clearly about each one and the implications for your business before you sign the lease. 

Common restrictive terms in commercial leases

Commercial landlords often include terms in leases as a way to protect other tenants. This is especially common in shared buildings. It’s possible that your hours of operation or conduct in shared areas might be covered in the lease. 

You might not be able to sublease the space if your business doesn’t work out or you have to move to a new space. This could mean that you’re subjected to an early termination fee if you‘re unable to maintain the lease. 

Some commercial leases also have restrictions on liability for the landlord. This could mean that you’re responsible for certain damages or losses related to the lease or leased space. There’s also a chance that the tenant may be responsible for repairs and maintenance of the leased area. Restrictions on what can be done regarding the structure or layout will be covered in the lease. 

Handle your commercial leases carefully

Remember that commercial leases are binding contracts. You must comply with the terms in them or you can face legal consequences. For this reason, you should review the entire lease and have someone familiar with this type of contract review it so you can ensure you fully understand each term.