Commercial Lease Agreements
Important legal considerations when negotiating lease agreements.
The Right Tenant for the Right Location
Whether you own commercial property that is offered for lease, or you own a business and are looking to rent space, it is important that the tenant’s business model is appropriately matched to the available location. This includes not only negotiating mutually agreeable rent and expenses, but it also requires that local ordinances, including zoning, allow the proposed use, renovations, and associated requirements like parking. Additionally, competition in a multi-unit commercial location should be considered. These are just a few examples of many considerations when matching the tenant to a location. Both the landlord and the tenant benefit when the tenant’s business thrives.
While commercial leases typically include terms addressing predictable, routine matters, the terms are nonetheless frequently negotiated. For example, most commercial leases address maintenance and repairs, however, the delegation of responsibility for these expenses varies from lease to lease. Similarly, lease terms regarding preparing a new unit, guarantees of payment, and the right to renew, vary. Commercial leases should include more provisions than residential leases, many of which directly affect the profitability of both the owner’s real estate investment and the tenant’s business. For this reason, leases should be drafted and negotiated by an experienced New Jersey commercial lease agreements attorney who is familiar with commercial leasing, business, land use, and permitting.
State Specific Requirements
While residential leases are subject to many overriding consumer protection requirements, commercial leases are treated as a contract between two businesses where both landlord and tenant are equally accountable for their agreements. However, legal requirements do arise out of commercial land ownership and occupancy and must be considered. For example, tenants who pay real estate taxes may have certain rights to appeal assessments. However, these rights might be compromised if a landlord fails to comply with municipal reporting requirements, resulting in a dispute. Similarly, the actions of a tenant may create governmental liability for the property owner, or visa versa. An experienced New Jersey real estate attorney considers many factors when negotiating the commercial lease.
Remedies Upon Breach
Unfortunately, breakdowns sometimes occur in the landlord and tenant relationship. While these often involve nonpayment by a struggling business, disputes may arise out of noncompliance with any term of the lease agreement or as a result of third parties, such as government violations. When disputes arise, the parties must first look to the lease terms for notice and resolution requirements. Regardless, it is important that an attorney be consulted to advise of remedies upon breach, mitigating damages, and resolution of the dispute, including potential eviction, litigation, or if possible, a negotiated resolution.
Help is Available
A commercial lease is a sophisticated business contract which sets forth the long-term rights and remedies of both landlord and tenant. Simple form leases nearly always omit important terms or provide inadequate remedies upon breach. Hiring an New Jersey commercial lease agreements attorney with knowledge of business and real estate is important when entering into a lease agreement.
The attorneys at Shanahan & Voigt are knowledgeable business and real estate attorneys with experience representing both real estate investors and business owners entering into commercial lease agreements. Attorney, Nicole Voigt, has represented both property owners and commercial tenants throughout central New Jersey.
Do not rely upon form agreements or unwritten promises. The success of your business requires a solid foundation. With proper legal representation, you can enter into your commercial lease with confidence.