Knowing what's on a commercial lease and what its provisions mean can lead to better outcomes for business owners.

Key Takeaways:

• Commercial leases can be complicated
• These documents include information on rent, deposits, property use, repairs, and obligations
• Receiving professional legal advice ensures you understand the conditions
• PeytonBolin offers lease review services for business owners

Starting a business can be highly lucrative, especially if you find the perfect building in an ideal location to host your company. Leasing an office, warehouse, or other commercial space is one of the first steps you'll take before opening the business and will require you to sign a commercial lease agreement.

A commercial lease document outlines each party's rights and responsibilities throughout the tenancy. Unlike a residential lease, where information is typically standard, a commercial lease is a unique document containing various negotiable provisions. 

It's vital that you understand every aspect of your commercial lease before signing anything because a problematic agreement could create challenges for your business. Here's a look at five things every commercial real estate Florida lease should include before you sign.

1. Rent and deposits

Naturally, one of the most critical provisions of a commercial lease agreement Florida is the rental amount. The document should clearly outline how much rent the property owner will charge for tenancy, typically calculated by the square footage the business will use. 

Some commercial lease documents will include language on additional expenses the landlord expects the tenant to pay, like operating expenses, real estate taxes, and maintenance fees. It's possible to eliminate the uncertainty of these expenses by negotiating a gross or all-inclusive lease, which calculates a fixed, flat price, including those additional charges. 

Your lease should inform you of when a rent increase can occur and by how much. The ability to anticipate these extra expenses makes it easier to run your business. 

You'll also find information on the deposits you'll have to pay before moving into the commercial property. These deposits are refundable, but it's important to ensure you understand the stipulations the landlord can exercise to keep these funds before signing the agreement. 

2. Permitted use

Your landlord will put provisions into the commercial real estate lease defining how you can use the property. Business owners often negotiate their permitted use provisions to make them as broad as possible because this ambiguity can be beneficial if they try to expand their business or provide new service offerings in the future.

Negotiating a provision stating you can use the property for any lawful purpose is possible. However, many property owners will try to limit the building to specific uses. You'll need to ensure your lease doesn't prohibit any uses that could hinder your business later.

3. Exclusive use

Negotiating an exclusive use clause into your lease agreement could benefit your business. While not all companies need an exclusive use provision, including one that prohibits or limits the landlord from leasing space to a similar company within the same area could be valuable. 

For instance, if you run a children's retail clothing store in a strip mall, you could negotiate an exclusive use provision preventing the landlords from leasing space to another children's clothing shop in the same mall. Having this item in your lease protects your company from competitors. 

It's worth noting that negotiating an exclusive use clause can be challenging because there are so many aspects you'll need to consider, and landlords might be hesitant to accept. Using an attorney to assist with negotiations and review your documents could put you in a better position as you close the deal.

4. Maintenance and repairs

By default, landlords in Florida are under no obligation to maintain or repair leased commercial space. However, tenants can negotiate contract provisions defining each party's specific maintenance and repair obligations. No matter what, tenants should always complete a thorough inspection of the property before signing a lease in search of pre-existing damage.

When the lease agreement includes a clause obligating the landlord to make repairs, the tenant has legal protection through Section 83.201 of the Florida Statutes. The gist is that if the landlord is responsible for repairs, the tenant must inform them in writing. From there, the landlord has 20 days to complete the repairs. 

The tenant can withhold rent if the landlord doesn't complete these repairs within 20 days. It's also possible for the tenant to abandon the property, terminate the lease, and avoid future rent charges in this scenario.

You must understand what your lease says about repairs and maintenance so you know your rights and responsibilities as a tenant. Thoroughly comprehending these documents also ensures you use your rights as a lessee to your advantage.

5. Casualty provisions

Beyond the standard maintenance and repair clauses are casualty provisions outlining each party's obligations if a flood, hurricane, fire, or other natural disaster damage the commercial property. Casualty provisions are vital to any commercial real estate Florida lease in coastal areas because of the elevated risk of flood or hurricane damage.

In short, commercial tenants should ensure their casualty provisions include the right to repairs if a disaster damages the leased space, the right to terminate their lease if the property is unusable following the disaster, and the right to abatement of rent until the property is restored. Failure to include these provisions could leave commercial tenants on the hook for repairs or force them to pay rent on a property they can no longer use.

Get the legal assistance you need

Commercial lease documents can be complicated, as they often use legal terms and language you might need help understanding. These terms could leave you in a challenging position if you unknowingly agree to terms that aren't in your best interests.

PeytonBolin provides the legal assistance you need to negotiate a commercial lease agreement Florida. Our commercial lease review service ensures that you understand all the terms in your lease and that they're favorable to you, minimizing potential liability. Contact PeytonBolin to learn more about our commercial real estate services.