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What should you look out for in a commercial lease?

On Behalf of | Nov 17, 2020 | Real Estate Law |

Commercial leases lack most of the common contract protections afforded to residential leases in Oregon, which means your protection is up to you and a strong contract. If you agree to lackluster provisions, you might open yourself to exploitation that remains throughout the term of your contract.

As Forbes describes, starting your business as soon as possible is exciting, but you should always review the terms of sale.

Lack of information

One of the key ways a lease may obscure things is unclear or absent information. Understanding the demographics of an area, and therefore potential revenue, is difficult if the landlord provides no data.

Pushing for information is important. Asking for the expense history of a property may lend light to any problems or potential capital projects planned in the coming years. Any math should be clearly present and defined when determining anything to avoid misinterpretations.

Details that lock you in

Specific responsibilities like adhering to health and safety guidelines and obligations like necessary upgrades or modifications may fall on you as a tenant if things are not clear. An unfavorable force majeure clause may leave you high and dry if certain circumstances arise.

Another niche detail to specify is the right to change things up within a contract. Having the right to give back space after a few years or having the first claim on newly available space is something you could specify from the beginning.

Sloppy documentation

The last thing you want to do when starting business in a new location is kick things off with disorganized paperwork. It leads to hassle and may even affect your bottom line. Knowing that your contract protects you, represents your interests and leaves nothing unclear may provide a better foundation for your business to thrive.