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Important Lease Clauses Business Owners Should Know About

In a prior post, we explored the questions that growing businesses must confront when looking for commercial space: whether to rent such space or to purchase it. For those that are not in a financial position to make an outright purchase, renting is their best option.

For those making this choice, it is still prudent to make sure that the terms are favorable. After all, entering into a bad lease could be just as catastrophic to a business as a failed marketing campaign. With that, it is important for business owners to pay close attention to the various clauses included in commercial lease agreements. This post will focus on a few.

Sublease – This clause allows you to lease the space to another business. This type of flexibility is important because business plans can change. There is no sense in paying on business space when you are not doing business in it.

Co-tenancy clause – Part of the attraction of a particular space is doing business next to a prime anchor tenant. But if that tenant leaves, what will happen to your business? Because of this possibility, having a co-tenancy clause could be helpful. This provision allows you to break the lease if the landlord does not replace an anchor tenant within a reasonable time.

Exclusivity clause – Who wants to do business next to a direct competitor? Because of this, it is important to make sure your lease as an exclusivity clause that prevents a landlord from allowing a competitor to lease any other area on the premises.

If you have additional questions about commercial lease clauses, an experienced real estate attorney can help.