What are the differences between a commercial lease and a residential lease?
It is important to understand that commercial leases differ significantly from residential leases, especially if you are entering into a commercial lease for the first time. Here are some key differences to be aware of:
1. Limited legal protection: The law provides less protection for business owners compared to individuals leasing residential properties. It is assumed that as a business owner, you are knowledgeable enough to protect your own interests.
2. Additional costs: Commercial leases often come with various additional costs that may not be present in residential leases. Failing to understand these costs upfront could result in unexpected expenses that could make your business financially unviable. Terminating a commercial lease early may also come with significant penalties.
3. Individualized terms: Commercial landlords have more flexibility to negotiate individualized terms with each tenant. This means that your lease agreement may differ significantly from neighboring businesses leasing the same space.
4. Increased restrictions: Unlike residential leases, commercial leases often come with more restrictions. Landlords may impose limitations on the type of business you can operate, your operating hours, and other aspects of your business operations.
Given the complexity of commercial leases, it is advisable to seek legal assistance when negotiating the terms of your lease. This can help you avoid potential pitfalls and disputes that may require legal intervention. If you need assistance reviewing an existing lease or negotiating a commercial lease, feel free to contact us for a consultation.