Many people believe that since they have rented apartments in the past, they can handle their business' lease agreement. Unfortunately, the two are worlds apart. While residential leases have standardized forms, commercial leases are much more customized and complex.
Residential leases tend to be for a shorter amount of time (1-3 years), much less complicated, and include greater protections for the tenant. Commercial leases usually last longer periods of time, (sometimes up to 20 years) and are much more difficult to break than a residential one. In addition to customized language, commercial leases usually include special features or build-outs the landlord includes to help close the deal.
When it comes to residential leases, the government leans heavily toward protecting residential tenants from potentially shady landlords. It is believed that the tenants don’t have the knowledge to deal with these lease agreements. On the flip side, most states provide little protection for commercial tenants. States assume that businesses will use lawyers and other experts to help negotiate an agreement with the landlord. For all of the above reasons and others that may come up, it is imperative that commercial lease agreements be reviewed by a lawyer experienced in handling business contracts.
One scenario that comes up often involves commercial tenants who are unable to pay rent (similar to the current COVID-19 issue). In situations like these, we recommend four steps:
Review your lease.
While commercial leases don’t often favor tenants, it is important to start by reviewing your lease. Special provisions may be included in the lease related to an emergency or if the government forces a shutdown.
Check your insurance policy.
According to USA Today, “For each of the past 17 years, the All-England Lawn Tennis Club [(Wimbledon)] has paid for an insurance policy to guard against losses if Wimbledon should have to be canceled in the event of a worldwide pandemic. That preparation will finally pay off this year. According to a report by the Action Network, the insurance will result in a payment worth $141 million--or nearly half the amount that the club expects to lose as a result of the cancellation.” Just as checking your lease is important, it is critical to review your insurance policy to see if you might be covered. Additionally, you should call your agent to verify whatever you find in your policy.
Call your landlord.
If your lease and insurance do not offer any solution, we suggest you contact your landlord. Providing your landlord with an honest explanation of your circumstances is a great place to start. It doesn’t hurt, because we have found that some landlords are willing to work with tenants. If you reach an agreement with your landlord, be sure to document it and have yourself and the landlord sign the agreement. You may need to confirm with a lawyer that this new agreement is enforceable.
Hire legal counsel.
If nothing is working or if you don’t want to negotiate with your landlord, contact your lawyer. If you don’t have a lawyer or wish to work with a new one, our team of skilled and experienced lawyers should be your first call. In a very short period of time, we will be able to advise you regarding your lease agreement and recommend what changes may be needed to help protect you and your business. To talk with one of the area’s strongest contract lawyers call CORPlaw today.
It’s important to realize that commercial leases are much more complicated than residential leases. They require specialized knowledge and experience. These commercial leases usually have limited protections for businesses; however, a skilled lawyer will be able to help you navigate the process and negotiate with your company’s best interest in mind.
About CORPlaw. Headquartered in Miami, FL, CORPlaw is a boutique business law firm that helps modern entrepreneurs grow and protect their business. Founded in 2017, this minority and female-owned law firm has advised countless small business owners, startups, and creatives through the state of Florida, the national, and abroad. The CORPlaw team continues to grow and build a reputation of professional excellence and client satisfaction. Contact CORPlaw today at 1 (833) 545-7526, email@example.com, or on our website (www.corplaw.us).
This article is for general information only. The information presented should not be construed to be formal legal advice. By using this blog site, you understand that there is no attorney-client relationship between you and the blog site publisher. The blog site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
 This write-up provides citations specific to Florida rules. You’ll need to check with the bar association and regulations governing lawyers in the state your lawyer is practicing law in.  See supra, note 1.  See supra, note 2.  See supra, note 3.  Steve Gardner, Report: Wimbledon to Receive $141 Million in Pandemic Insurance Payout, USA TODAY, (Apr. 9, 2020), https://www.usatoday.com/story/sports/tennis/2020/04/09/wimbledon-pandemic-insurance-policy-payout-141-million/5123987002/.  See supra, note 4.