Five Crucial Things To Do Before Signing a Commercial Lease

If you are like many business owners, you will probably be leasing a physical space for your business. However, before you sign your Commercial Lease, you should consult with a Jurado & Farshchian business attorney to ensure that you get the best deal possible while minimizing your liability. Here are five things considerations and preparations to keep in mind before signing any Commercial Lease agreement.

Have Your Business Structure in Place

Many commercial landlords prefer tenants that whose business has already been filed and approved with the state of Florida. In addition to giving you greater legitimacy, it is always advisable to have some sort of business structure, such as corporation or LLC, that can protect you from personal liability should a dispute or issue arise. Our attorneys can advise you on the best business structure and help you establish your business.

Carefully Review the Commercial Lease With Your Jurado & Farshchian Attorney

This may seem like an obvious requirement, yet it is all too common for business owners eager to get their enterprise off the ground to simply skim through a lease before signing. It does not help that Commercial Lease agreements tend to be long and full of terms, conditions, and fine print that are difficult to parse through. This is precisely why you should have a Jurado & Farshchian attorney by your side to thoroughly investigate every line and item before you execute the lease.

Pay Attention to the “CAM” Fees

Among the unfamiliar terms used in many commercial leases is “CAM,” or “Common Area Maintenance.” This is a charge levied on tenants to support the upkeep for the building’s common areas, such as a lobby, courtyard, elevators, or parking garage. You will be allotted a proportion of the CAM corresponding with the percentage of the building you are renting (e.g., the larger your space the larger your share of CAM).

Some landlords include in their CAM charges numerous other expenses such as legal fees, marketing costs, employee benefits, or build-out costs for other units. As with any other provision in the lease, you and your attorney must read the fine print carefully and make sure you do not end up paying for more than you should. Your Jurado & Farshchian attorney will negotiate with the landlord to remove any extra charges that should not be there.

Look Out for “Capital Expenditures”

Sometimes called “CapEx” fees, these cover the acquisition, repair, or replacement of certain assets such as the roof, air conditioning system, or other important structural items. How they are applied and charged varies from landlord to landlord: some will require you to cover the entire cost of fixing or replacing something in your unit, while others may ask only for a percentage or set amount of the total cost they incur. Your attorney will investigate these charges and determine if they are fair and can be negotiated to your benefit.

See if the Commercial Lease Can be Assigned

For most businesses, location is a key asset and source of value. So if you have plans to sell your enterprise, or at least want that option on the table, you should check if the lease allows for an assignment, or transfer, of the lease agreement from you to someone else. Landlords differ on this policy, with some retaining the right to terminate your lease if you request an assignment. If there is such a provision prohibiting a lease assignment, we can negotiate to have it removed, or at the very least to be modified to allow an exception in the event of a sale. Bear in mind that the landlord will typically retain the right to reject an assignment of the lease if the new tenant does not meet their terms.

Never Sign a Commercial Lease Without a Jurado & Farshchian Attorney

Our attorneys understand all of the relevant legal language used in commercial leases and how it applies to your business. We pay close attention to the leasing period, rent due dates, special assessments, the duties and responsibilities of the landlord, and any special terms or provisions you have agreed on. We will protect you from any ambiguities, unfair conditions, or hidden hazards that may negatively impact your business. We will negotiate on your behalf and do whatever it takes to ensure you and the landlord come to an agreement.

If you need a commercial lease reviewed or negotiated, do not hesitate to contact us at 305–921–0440 or email us at romy@jflawfirm.com.

Read more at Five Crucial Things To Do Before Signing a Commercial Lease

Written by

Business & Immigration Lawyer @JFLawFirm passionate about helping #entrepreneurs and business owners thrive. Follow @MarinaTitle Florida's Premier Title Company

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade