Opening and running a business is not a simple undertaking. Included in the long list of tasks to oversee, procuring the space needed to operate which fulfills necessary size, zoning, and utility requirements can be daunting. Once the search is over and the right commercial space is found it is crucial the commercial lease is set up in way that benefits both the landlord and the business. Even if a space is in the ideal location, the perfect size, and has all amenities desired, if the lease is not carefully read and understood both parties could end up with higher costs and more difficulties than anticipated. It is always advisable as a tenant or landlord to have your lease agreement at least reviewed by an experienced real estate attorney. A thorough and well executed commercial lease agreement is crucial in building a strong foundation for businesses of any type or size. A trained eye can help determine any potential issues that may arise and explain in relatable terms what all a lease entails. A commercial lease can be used for any space whose purpose is to house a business: offices, warehouses, retail spaces, or restaurants. No matter how big or small the business, there is usually a lot at stake for both parties.
In the State of Arizona, commercial leases are far more complicated than residential leases. Because the larger scale of commercial spaces and their numerous purposes, the form and substance of commercial lease agreements must cover many more provisions and are not standard even within state lines. There are common aspects that should be included when drafting and signing any commercial lease: for example a description of: the premises, lease term, rental amount and fees, security deposit, and use which stipulates building rules and regulations, signage, and any noise conditions. These are just the basics and are very similar to residential leases most are familiar with.
Commercial leases typically also contain unique features that should be scrutinized if you are considering entering into a lease agreement. One of the most common which is overlooked by first time business owners is the responsibility of maintenance and repairs. In residential spaces, those responsibilities typically fall on the landlord but in commercial settings the tenants may be the responsible party. This is further complicated if the space is one of several in the same complex with shared common areas like those in malls or courtyard shopping centers. It is common in these situations to require tenants to pay for maintenance or repairs depending upon the square footage of their space; if your lease is for 20% of the overall space, you could be liable for 20% of the cost. Also, commercial lease agreements are not subject to certain consumer protections laws allowed to residential tenants. For example there are no rules regarding tenants’ privacy or limits on the amount of the security deposit.
However tedious a commercial lease may be, most are highly flexible and negotiable. In order to get the most out of a commercial space it is critical that your lease fits your unique situation. If done correctly, a commercial lease can help a business flourish. On the other hand, if details are overlooked a business may find itself in over its head. If you are considering a commercial lease, it is always in your best interest to have an experience real estate attorney assess and explain it to you before signing. They can help explain things in clear, concise language and negotiate with the other party to ensure the best possible outcome.
If you have any questions about a commercial lease agreement, contact the experienced real estate attorneys at Harlow Spanier & Heckele PLLC. Our attorneys not only have experience in real estate litigation but also in the real estate market. Call today for a consultation. (520) 495-0869 or email [email protected]
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