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Which commercial lease terms can you negotiate?

| Oct 23, 2020 | Commercial Real Estate

When you enter into a commercial lease, whether as the lessor or the lessee, you and the other party can negotiate virtually any of its terms. While this gives both of you incredible flexibility, however, it also requires each of you to understand a variety of potentially complicated concepts and how the lease terms you agree to could impact the way in which you can conduct your business once you sign the agreement. 

Some of the most commonly negotiated commercial lease terms include the following: 

  • The length of the lease period 
  • The amount of the security deposit the lessee pays and the conditions under which he or she will or will not get it back when the lease expires 
  • The amount of monthly rent the lessee will pay 
  • The methodology by which the monthly rent can increase over the term of the lease 
  • The restrictions, if any, imposed on the lessee’s use of the property during the lease period 
  • Whether or not the lessee has the right to sublease the premises during the term of the lease 

Commercial lease language and structure 

Given that a commercial lease represents a legally enforceable contract between you and the other party, your wisest strategy consists of ensuring that all your leases contain as much plain English and as little legalese as possible. In addition, because commercial leases tend to contain numerous pages, you may also wish to consider breaking yours into small, understandable and specifically numbered sections, one for each lease term. Such drafting practices can lessen the chances of ambiguity that could result in a contract dispute. 

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