If you're a business owner considering leasing commercial space for your business, it's important to understand how commercial leases work. In this blog post, we'll explain the basics of commercial leases and what you need to consider before signing one. We'll also outline the different types of lease agreements and what each one entails. So, if you're curious about commercial leases, read on!
What is a commercial lease?
A commercial lease is a contract between you and your landlord that outlines the terms of renting business space from them. Both parties will be expected to follow the rules outlined in the lease agreement. If either party fails to do so, it could result in consequences such as fines or even eviction. In some cases, this type of situation will cause you to lose your investment and jeopardize your business. It's important to avoid these types of problems by understanding how leases work and what they entail before signing one, especially if you're a new business owner.
You should note that there are different types of commercial leases:
1) Gross tenancy: This type of agreement means that the tenant agrees to pay a flat rate of rent.
2) Retail tenancy: This type of agreement means that the tenant is in charge of paying all operating expenses and utilities.
3) Licensed tenancy: This type of agreement means that the tenant operates under a license and pays a royalty to their landlord.
4) Head lease: This type of agreement means that the head-lessee is in charge of operating and maintaining the premises for which they pay rent to another party (typically, this party will be an investment company). Keep in mind that if you've never signed a commercial lease before or it's been some time since your last one, you may want to seek legal assistance before agreeing to one. If you find yourself unsure about how leases work and what they entail, you can always check out this free course on commercial leases from Wiser.
What should I keep in mind before signing a lease?
It's important to note that there are some restrictions when it comes to certain types of businesses and the type of business space you're leasing. For example, if your business is considered hazardous or very loud, such as an electric generator manufacturer, your potential landlord may have restrictions against tenants with these kinds of businesses. It's also worth noting that if you operate a business in a shopping centre or mall, your rent will be determined by the amount of foot traffic through your store. You'll typically have to share any profits earned from customers who find their way into your shop because of your location with the landlord of the mall where your business is located.
Commercial leases can vary depending on many different factors, so it's important to find one that works for you and fits within your budget. If you have any questions about how commercial leases work or what options are available to you, talk to a real estate lawyer today. A lawyer will be able to explain how leases work and what they entail in more detail as well as offer legal advice for your specific situation.
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