Business Law and Commercial Leases

Most businesses need a physical office where employees can congregate to discuss ideas. However, not every business can afford to buy an office space. For such businesses, renting commercial property is a viable, cost-effective option.


A commercial lease is required when you rent a commercial property for the purpose of conducting business. This lease is a legally binding contract between the landlord and the company that wishes to rent the property.


Read on to learn why it’s important to have a business lawyer in Sonoma County review any potential leases to make sure that your business is entering into a fair contract.


Difference Between a Commercial and Residential Lease


Before you rent commercial property, make the effort to understand how commercial leases differ from their residential counterparts.


A major difference between commercial leases and residential leases is that unlike residential leases, commercial leases are not subject to consumer protection laws. For example, there are no restrictions on the amount of security deposits and, unlike a residential tenant, a commercial tenant does not have the right to privacy.


Though not written in stone, a commercial lease is difficult to change or break. They are more binding than residential leases and typically are usually subject to much more negotiation than residential leases.


A commercial lease is usually more complex than a residential lease. Many commercial tenants struggle to make heads or tails of their commercial leases or misunderstand lease terms. Before signing a lease agreement, hire a business lawyer in Sonoma County. An experienced lawyer will negotiate the commercial lease on your behalf to help you get a fair contract.  


Important Lease Terms


A commercial lease should include terms regarding:

  • Rent (the rental amount, the due date, and allowable increases/escalations)
  • Lease duration and whether there are renewal options
  • Security deposit (the amount of security deposit, when and how it will be returned, and when it can be retained)
  • Whether the rental amount includes property taxes, maintenance expenses, and insurance, or you will be charged for them separately
  • Whether any improvements or modifications are proposed to the property and who will bear all the expenses incurred


Determine If the Lease is Right for You


Before you sign a commercial lease agreement, thoroughly read it. Make sure it reflects the agreement between you and the landlord. If your business is growing, you may soon outgrow your office, so you should consider looking for a short-term lease with renewal options instead of a long-term lease.


If you plan to modify your office space, the lease should specify who will make the proposed modifications. If you do not want your competitors to use the property, make sure the lease prevents the landlord from renting out to other similar businesses.


Need help writing a watertight lease agreement? The Law Office of Stephen M. Beckwith has you covered. Stephen M. Beckwith is a skilled, experienced, and resourceful business lawyer in Sonoma County. He has years of experience creating customized legal solutions for his clients. To schedule a consultation, call (707) 526-5454.