Five Issues To Watch Out For in Your Commercial Lease Agreement


While some businesses pay the money to own their own buildings, the fact is that most business owners find it more practical to simply rent the space for their businesses. However, this means negotiating a lease agreement with the property’s landlord, which can lead to a number of potential legal pitfalls. Here are five legal issues you should watch out for when you negotiate your commercial lease agreement: 


  1. Have you laid out terms for rent?
    • One of the most critical terms in any lease agreement are the terms regarding rent. This dictates not only how much is owed or when it is due, but also whether rent will increase over time (and how it will increase over time). There should also be terms explaining what will happen in the event that you default on your rent, to ensure your rights as a tenant are appropriately laid out.
  2. Do your premises suit your business’ needs?
    • Different businesses have different needs from a building’s premises, and it is important to know that your business will be able to operate without difficulty. This means, for example, ensuring that it meets the power requirements for any electrical equipment you have, and that it has enough storage space for inventory or a loading bay for any large shipments you may receive. You should also ensure that local zoning laws permit the kind of business you are attempting to run in the building you are trying to run it out of.
  3. Does your lease delineate responsibility for maintenance and repairs?
    • Generally speaking, a landlord is responsible for basic maintenance of a commercial property’s common areas, while the tenant is responsible for the area inside their own business. However, it is important to lay out in your lease who is responsible for what, including what areas of the building are the landlord’s responsibility and which are the responsibility of the tenant. Otherwise, it could cause trouble when important repairs need to be made.
  4. Do you want the right to assign or sublease the property?
    • Many landlords try to be strict about who they allow to rent from them, but some tenants may want to be able to assign the right of their property or sublease to someone else. Before that happens, it is important to establish any rights of assignment or subletting in your commercial lease agreement. Failing to do so can cause major headaches, and can even lead to litigation.
  5. What are the terms for the length of the lease?
    • While most residential leases are renewed on a month-by-month basis or last for a year at a time, commercial leases can often last for years. This means it is especially important for tenants and landlords to agree on how long the lease will last, and whether the tenant has a right of renewal. This can help to avoid major business disruptions, and prevent potential landlord-tenant disputes in the future.


    The law office of Georgaklis & Mallas PLLC is experienced in various areas of real estate-related transactions. The firm’s skilled attorneys handle both commercial and residential transactions on behalf of lending institutions, real estate investment and management companies, business and individual clients. Call (718) 238-2400 for more information or to schedule a consultation.