What is a Commercial Real Estate Lease?

A commercial real estate lease is a contract between the tenant and the landlord: the tenant pays the landlord rent, and the landlord lets the tenant occupy and use the property.

Commercial property leases are contracts with different terms, rules, and laws than residential leases. The property could be land, a building, or a part of a building, like an office.  There might be several tenants in one property, such as an office or shopping center.  The tenant may build on the property and lease out the building, in effect becoming a sublandlord.

A commercial real estate lease agreement may have more parties than just the tenant and the landlord. The tenant could be a franchise operation, for example, and the landlord could have a property manager.  There might be other investors or lenders involved, as well which makes negotiating a lease agreement important.

Once it’s established who is involved in the transaction and what’s being rented, the next step is to put a commercial property agreement in place.  It’s a sophisticated business transaction, and usually the most expensive part of any business operation so you cannot just search online for a free form. This is a commercial contract, not a consumer lease, so different laws apply.  It doesn’t matter what the landlord (or the landlord’s broker) says, or what a party to the transaction thinks or believes or was told– it’s what’s actually in the document that counts. 

In the event of a genuine dispute, the parties will have to find another impartial third party to resolve the issue.  That usually means someone like a judge or a mediator.  That person wasn’t in the room or part of the discussions regarding the lease agreement, so they will rely on the written words in the lease contract when deciding what was really meant.  A real estate lease lawyer can make sure there is a meeting of the minds and that everyone understands what their rights and responsibilities are under the property lease agreement.

There is no requirement that a commercial lease contract be fair to both parties, nor is there a “standard” commercial lease agreement, so it’s really important for a business owner to have a commercial real estate lease lawyer to review the lease to protect the business, and the business owner, before signing on the dotted line.

I hope this information has been helpful.  I’m Jenna Zebrowski, and I’m a real estate lease lawyer, but I’m not your lawyer yet.  This information is provided not as specific counsel, but as general information to help you make an informed decision about your commercial lease.  Remember, hiring a lease lawyer in often much cheaper than getting in a bad business situation.  Give me a call if I can help (817) 841-5762.


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