3 Must-Have Clauses In A Commercial Lease Agreement
Posted on: 22 September 2021
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Retail businesses often rent space from commercial landlords. Leases are used to create a legally binding contract between the retailer and the landlord.
A commercial real estate lawyer should always be brought in to help you negotiate the terms of your commercial lease. Having professional help will ensure that you include all of the essential must-haves that will protect your retail business throughout the course of the lease.
1. Co-Tenancy Clause
Any good commercial lease agreement should include a co-tenancy clause. This is especially true if the retail space you are renting is located in a shopping center that is anchored by a major chain store.
The major chain store will attract a lot of customers, which will help increase the visibility and sales of your retail store. The co-tenancy clause in a commercial lease allows you to break your lease in the event that the major chain store leaves the shopping center. Smaller retail stores can lose significant business when a retail behemoth moves away, and being able to break your lease without legal backlash could help you avoid expensive fees.
2. Non-Compete Clause
Small retail stores operate on thin margins. It's critical that your store be the only one of its kind within a shopping center if you hope to maximize your success over time.
Your attorney can help negotiate a non-compete clause in your commercial lease agreement. This type of clause prohibits a landlord from leasing commercial space to any business that would be considered a direct competitor to your business. A non-compete clause will protect your retail location and give you the best possible chance at growing your customer base in that location.
3. Fair Cure Period Clause
Commercial real estate attorneys understand the importance of negotiating a fair cure period in every one of their clients' lease agreements. A cure period is the amount of time that you will have to rectify any action you take that breaches the terms of the lease.
The most common example is being late on a rent payment. Without a fair and explicitly stated cure period included in your commercial lease, a landlord could take legal action against your company for being even one day late paying the rent. The cure period allows you to prevent small mistakes from jeopardizing the success of your business.
The terms that you negotiate in your commercial lease agreement will impact the profitability of your business in the future. Let an attorney handle the negotiation of your commercial leases to ensure all your must-have clauses are included. Contact a commercial real estate lawyer near you to get started.