26 Jan Commercial leases: An educational video series
A commercial lease is one of the most complicated contracts a small business owner is likely to face. It is a daunting document filled with language that is difficult to understand and hard to find what it is you are most interested in knowing.
By the end of this video series you will understand some of the features of a commercial lease so you can be a better-educated small business owner.
An introduction to the video series
What’s in a commercial lease?
In this video #MattTheLawyer talks about the major segments of a typical commercial lease. There are lots of segments and some of them get jumbled around in the lease. This video will go through descriptions of the terminology that you should know.
Key terminology in commercial leases
Given that a commercial lease is one of the most complicated contracts a small business owner is likely to face, #MattTheLawyer is here to take you step by step into understanding commercial leases! Join us in this series to learn about these key terms and situations you could find yourself in.
In this video #MattTheLawyer introduces the concept of additional rent, which entails the additional payments that are made to a landlord to cover common expenses, such as common area maintenance fees, the landlord’s insurance on the building, and the real estate taxes that the landlord has to pay.
Do you have questions about commercial leases? Schedule a consultation with #MattTheLawyer.
Are you ready to draft your commercial lease? Schedule a consultation with #MattTheLawyer.
Some commercial leases contain a relocation clause that allows the landlord to unilaterally move a tenant. These usually are found in shopping malls, shopping centers, or business parks. The clause allows the landlord to move the tenant if it suits the landlord’s business. The clause also says the landlord will pay the moving expenses, but make sure all your expenses related to the move are covered. In this video #MattTheLawyer gives advice about your rent if you are moved involuntarily.
Low probability events and eminent domain take up a lot of space and verbiage in a commercial lease, particularly for an event that probably has a less than 1 percent chance of ever happening. Here #MattTheLawyer talks about the meaning and impact of the clause.
You may already know what plate glass is, but in this video we also talk about who is responsible for the plate glass on your leased premises.
Tenant Improvement Allowance
Most new commercial lease tenants do not have the capital for an expensive building, but a Tenant Improvement Allowance is help from the landlord to make a buildout happen. Landlords will provide funds to get tenants into spaces.
Here is basic advice: pay the tradesmen who work on your commercial space. If you don’t they can make it impossible for the landlord to sell the property without paying them. Also, mechanic’s liens are forbidden by leases for that very problem.
The buildout phase of any commercial lease carries a few risks. We talk about what the phase is and what risks need to be kept in mind.
Want to talk with a lawyer about your commercial lease? Schedule a consultation with #MattTheLawyer.
Unlike a residential lease which might have 30 or 60 day lease renewal notices, a commercial lease requires much more notice—often as much as 9 months. If you have a renewal options, make sure you give the right notice to the landlord well in advance, or even if the landlord allows you to stay, you could be looking a paying a premium.
In addition to helping pay the landlord’s insurance through the triple net or NNN clause (along with taxes and common area maintenance), most commercial leases will include a clause or section that requires the tenant to carry specific kinds of insurance in specific minimum amounts. Understanding what you need to carry is vital so you can work with an insurance broker to get the best coverage.