Essential Legal Provisions in a Commercial Lease Agreement
Instead of buying a property, most businesses would prefer to rent one because it requires less capital. Thus, if you are an entrepreneur who wants to save some money for necessary investments such as equipment, it would be wise to enter into a commercial lease arrangement, which is a contract between a corporate entity and a landlord for the use of a particular establishment for a certain period. Of course, you have to understand the provisos thereof so that you will know what your rights and responsibilities are.
Compared to a residential lease, the provisions in a commercial charter vary in the sense that the latter has fewer legal protections and has more varied and negotiable terms. Although you would need a solicitor to look into the agreement and see to it that your rights are well protected, it is best if you yourself understand the terms enumerated below.
- Rental Amount – Aside from calculating the monthly occupation fees, the contract should also stipulate who shall pay for other costs, such as repairs, insurance, property taxes, and utilities.
- Security Deposit – This should be clearly stated on the written document, including the conditions for its return. This will save you from filing a lawsuit in the future just to recover the sum you tendered.
- Rent Increases – Usually, there is a percentage-based raise every year. However, you have the legal right to ask your landlord to agree on a cap so as to avoid unmanageable costs later on.
- Use Clause – This is very essential to define what activities the tenant may lawfully engage in while renting the premises. While the owner of the premises can protect the building from damage, the company leasing it will also be able to limit its liability.
Understanding all these will definitely help save you from the risks of legal troubles in the future. And with more peace of mind, you can then devote your time, effort, and money to making your business operations more efficient. If you want to learn how you can improve your processes, browse this site for an excellent project management and warehouse solution.
11.08.2009