It’s easy to enter into an oral lease agreement with your landlord. There are no confusing documents to read and no formal rules. But easy doesn’t mean smart. Let’s look at why you need a written commercial real estate lease.

Your monetary investment doesn’t come cheap.

When you enter an agreement with a landlord, you’re typically responsible for putting down a security deposit. When you end the lease, you have the opportunity to get that deposit back if the premises is in acceptable condition. Without a written agreement, you have no idea what the landlord deems acceptable. He could change his mind and you could lose your security deposit. With a written lease, specific terms will be defined in order to receive your security deposit back.

As a tenant, you will also be responsible for rent. A lease will, in no uncertain terms, define the amount of rent and due date. This will give you peace of mind. You won’t have to worry about the landlord changing the rental amount each month or asking for rent earlier than expected.

If a dispute arises, the landlord has the option to pursue legal action. That could mean your credit rating takes a hit, especially if you signed the lease in your name, or if you have a personal guarantee. If you’re forced out of the property, you not only possibly lose your security deposit, but you’ve got to come up with even more money to find a new location.

Property

Your landlord should be maintain and security your space. But if there’s no written agreement in place, you have no way of knowing who is responsible for what. Issues could come up such as water damage from busted pipes or a faulty HVAC system. Maintenance obligations can add up to a hefty amount if there are problems. The repair money may come out of your pocket simply because you didn’t sign a lease that explained the responsibilities.

Expect the unexpected

That’s not something you want hear in regards to your commercial real estate lease. You want to know what to expect! That’s where a written lease comes in.

• Your landlord could evict you with very little warning and no reason, and there’s nothing preventing him from doing so.
• You want to promote your business. Can you display a company sign?
• Let’s say you want to be the only store in the building that sells watches. Your landlord can bring in other watch dealers without telling you.

Without a written lease, the landlord can get away with practically anything. He/she doesn’t have to ask your permission or adhere to any rules. Nothing is written to define the terms. Leases are created so that each party (the landlord and tenant) is held responsible.

Although oral leases are enforceable in the state of Texas, you need to know what to expect and what’s permitted. When you hire a commercial real estate lawyer, she helps protect you from the unexpected. Call me to discuss creating a safe, enforceable, predictable lease for you business.

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