Can you spot a poor commercial lease? Here’s what to look for.

On Behalf of | Sep 12, 2024 | Real Estate Law

Rushing through commercial lease agreements without pausing to consider how the terms could realistically affect your business can lead to conflict later on. Commercial leases in Florida can be complex and it is critical to comb through the language.

Understanding possible pitfalls can save your business time, money and stress. Here are five examples of critical red flags to look for before signing your commercial lease.

Unfavorable relocation clauses

These clauses allow the landlord to move your business to another space within the same property, potentially disrupting your operations. If such a clause exists, ensure that it specifies beneficial conditions like maintaining the same rent and a space of similar or comparable quality.

Vague maintenance and repair terms

Ambiguous provisions regarding property upkeep and maintenance can lead to unexpected repair expenses. Confirm that the lease clearly outlines responsibilities for major systems like electrical, plumbing, HVAC and fire safety.

No non-disturbance clause

A non-disturbance clause can protect you if the landlord’s lender forecloses on the property. Without this clause, your lease could be nullified upon foreclosure, leaving you without a place of business. A non-disturbance clause can guard your tenancy.

Hidden charges

Be wary of leases with vague or hidden fees, and insist that all charges are clearly listed in the lease agreement. You can also request the right to audit these charges annually. Such transparency prevents unexpected costs and ensures you only pay for legitimate expenses.

Unclear renewal terms

Renewal clauses should be explicit about the conditions for extending the lease. Vague renewal terms can cause uncertainty and lead to legal disputes. Avoid a lease that does not specify the renewal notice period and potential rent increases.

As you can see, substantial due diligence can help you make certain the terms are fair. An experienced business and real estate attorney can help you review potential leases from an objective perspective.