Commercial lease agreements are complex yet essential legal documents. These documents establish and govern the relationship between the landlord and the tenant in a commercial property. Due to the importance of lease agreements, landlords and tenants must take time to understand the document and some of the potential pitfalls contained in it for their own interests. The commercial lease agreement contains some key provisions like the following:
The Term and Renewal
This is one of the provisions contained in the commercial lease agreement. The term and renewal specifies the duration of the lease, the available renewal and other renewal options available to the tenants. Tenants are urged to carefully follow this part of the lease agreement for it carries great significance in the entire agreement between them and the landlord.
The Rent of the Commercial Property
The rent provision in the commercial lease agreement is such an important and sensitive clause. It states how much the tenant will pay the landlord and when. It contains all the payment terms which include other charges shifted to the side of the tenant. If there are other details like services charges and others they are all covered in the rent part of the lease agreement.
The Exact Use of the Property
What and how the tenant is going to use the property they are leasing is another important detail covered in the lease agreements. Â This part of the agreement clearly outlines how the tenant will use the property for the period they will rent it. The part also mentions any restrictions regarding the use of the property in case any are preferred by the tenant.
Default and Termination
Default and termination is another important detail in the commercial lease agreement. This part stipulates the circumstances under which either of the parties involved in the leasing agreement can terminate their agreement resulting in the tenant vacating the leased property and the consequences that follow after that.
Insurance
The issue of insurance is another important part in the commercial lease agreement. Â This part allocates each party involved in the lease agreement an insurance obligation when leasing the property for use. Tenants and landlords should scrutinize the details of this part of the commercial property agreement to avoid any future conflicts and misunderstandings.
Common Pitfalls in the Commercial Lease Agreements
Commercial lease agreements are complex documents as they contain some pitfalls that if not well observed can result in serious problems in the days to come. Â Here are some of these pitfalls to watch out:
Use of ambiguous language
There are cases where the commercial lease agreements might use ambiguous language that is somehow hard for the tenant to understand.
Unfavourable Lease Terms
There are some lease terms that are utterly unfavourable to the tenant. These terms significantly limit the flexibility of tenants making it somehow hard for them to do some things. Every tenant must carefully assess their commercial lease agreements to ensure that they do not contain leases that might work against them in some ways.
Conclusion
Every tenant renting a property must carefully assess the commercial lease agreement they are given to ensure that it is suitable for them. Â As a tenant, focus on the provisions of the lease and some possible pitfalls contained in it to ensure that it is okay for you before signing it.
