Terms in a Commercial Lease

The terms of your commercial lease, when not thoughtfully negotiated, can come back to haunt you and your business down the road. This section of our site covers some of the most common (and important) commercial lease terms. You'll find information on:

Landlords Maintenance Requirements vs. Your Right to Privacy. One of the terms you are going to want to nail down is when your landlord can enter your space to complete necessary maintenance and repairs, as well as what exactly the landlord is required to fix. Depending on the nature and sensitivity of your business, you may also be concerned about your privacy. This is a balance that can be found in thoughtful Maintenance and Repair terms.

Rent Costs. One commonly used rent term in shopping centers and shopping malls is "Percentage Rent", which means a portion of your operating profits are paid as rent. You will want to iron out exactly how your rent will be calculated.

Rights to Expand (or Contract) and Improve. You want your commercial lease to be as flexible as possible with regards to the amount of space you'll have access to in the future. If you expect that your business will grow, then you want to secure some rights to lease more space if you need it. Alternatively, you may also want to consider an option to lease less space so that you can save on rent costs if you find you don't need as much space as you had originally anticipated. You will also want to negotiate any improvements that the space needs, and figure out who will pay for it.

Use and Exclusive Clauses. Sometimes the landlord may want to limit how you can use the commercial space. Depending on your business requirements, you may need to negotiate for more usage rights. If you have some leverage with the landlord, you may be able to get an "exclusive" clause with your landlord, which can prevent your competitors from moving near your space.