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If you see these clauses in your lease, examine them carefully

On Behalf of | Jul 10, 2020 | Real Estate

Commercial tenants enjoy far less protection under the law than residential tenants because the law presumes that a commercial tenant is savvy enough to avoid a bad deal. But what if you aren’t?

Everyone starts somewhere, and if you’re fairly new to the game of commercial leases, you can easily make some big mistakes. Most commercial leases are far from straightforward. They usually contain a number of clauses that have to be examined carefully.

Here are some of the top clauses that you want to examine with care before you sign:

  • Rent escalations: These clauses are almost a given in any commercial lease, but you want to make sure that your agreement is fair. You need to try to negotiate for a cap on increases and make sure that you have a clear understanding of when — and how — your rent will rise.
  • Common area maintenance (CAM) fees: Again, these are almost unavoidable in a shared building or development, but you want to make certain that what you pay is fair. You want the agreement to spell out exactly what portion you’ll pay and how those fees are being calculated.
  • Convenience clauses: You could find yourself out of business and out of luck if your lease contains this provision. It basically allows your landlord to terminate your lease for any reason — including an offer of higher rent from someone else.
  • Personal liability clauses: Generally you want to think long and hard about signing this kind of agreement. It can make you personally responsible for your rent and fees — even if your company goes bust.

The economic hardship that can come from a bad lease can be tremendous. Protect your interests by taking any lease you’re about to sign to an experienced attorney for guidance.