A commercial lease is a type of contract that rents usage of business property from one party to another for a specified time in return for payment. A commercial lease agreement sets the terms for the rent and can encompass taxes, expenses, and repairs for the property or land leased. Commercial leases are generally used to rent warehouses, office spaces, factories, or commercial buildings. Usually the price of the rent is dependent on the area of the space but can sometimes include a percentage of the profits of the tenant’s business.
The property owners normally want to protect their right to receive continued payments for the use of their property. The tenants, or parties agreeing to the lease, ordinarily want to protect themselves from increased costs, maintenance costs, or changes to the agreement during the time they occupy or use the property. Occasionally, the tenants want to also secure a right to sub-lease the property in return for payment from another party.
Virginia laws govern what terms can and cannot be included in a commercial lease. A commercial lease cannot deny usage to parties based on race, color, sex, religion, or nationality. The commercial lease must also abide by the Americans with Disabilities Act. Virginia laws also provide their own set of regulations for a commercial lease property owner and tenant relationship.
What should a commercial lease contain?
A commercial lease should name all the parties involved, describe in detail the premises to be leased, quantify the rent to be paid and when and how it shall be paid, specify any charges for late payments or increases in costs, quantify the amount of security deposit that should be paid by the tenant and what it can be used for, describe the rights and responsibilities of the property owner and tenant (including how and when utility bills will be paid), and determine the duration of the lease.
A good commercial lease should seek to avoid future disputes and should cover any and all aspects of the relationship between the property owner and tenant. It should seek to foresee and prevent potential problems like theft, vandalism by a third party, fire, flood damage, and various natural disasters.
Generally, commercial lease disputes are time and fact sensitive and should not be taken lightly. At Raheen Law Group, we can assist tenants with reviewing and understanding a commercial lease, negotiating the terms of a commercial lease, and providing consultation to tenants seeking to resolve a commercial lease dispute. Likewise, Raheen Law Group can assist property owners with drafting and creating legally binding commercial leases, negotiating the terms, enforcing the terms, and pursuing legal action due to breached terms of a commercial lease.
If you need help understanding, creating or enforcing a commercial lease, contact us for a consultation.