You are probably looking forward to generating a tidy profit in your business as a commercial tenant. You want to attract more people to use your products or services and increase your revenues. All this can only be achieved when you have an ideal space to do work in.
Knowing your rights when leasing a commercial property can help you protect your best interests. Commercial rental agreements turn sour too often. You won’t benefit from a war of words. Having an outstanding business attorney on your side can help you arrive at a quicker resolution.
Repairs in the Commercial Property
One of the key issues that typically result in a dispute is determining fault and responsibility for repairs. Business contracts can establish the ground rules and responsibilities. Based on this, there is always the potential for grey areas, which can result in confusion. A majority of landlords and leaseholders are not entirely versed with relevant commercial property lease laws in Alabama.
This makes it necessary to work with an attorney that can mediate disputes and help you move forward with your business needs. The alternative is being stuck in a contract that stifles your business or leads to ruined goodwill and reputation.
It’s vital that you define the party responsible for maintaining the commercial building and its interiors. It usually seems obvious that the landlord will be in charge of repairing things, such as leaking roofs and broken HVAC systems.
Taking this into account, everything is not always as clear-cut. Who is responsible if you carry out an extensive build-out? If you bear the cost of new shelving, electrical wiring, and carpeting, will the landlord still be responsible for any repairs? What if there is a broken neon on your signboard?
Such issues can result in potentially serious and costly conflicts if not addressed within the lease agreement.
Breach of Commercial Lease Terms
The lessor or the person leasing out the commercial property is usually responsible for creating a contract for the lessee or the potential entity/individual renting out the space. This agreement needs to include all legal provisions for protecting the involved parties. There are instances when a commercial lease contract may favor the lessor unfairly.
Commercial landlords may occasionally end an agreement before the lease term comes to an end. This can create serious disruptions to the daily activities of a business.
It may also interrupt your income stream as a business owner. You will need to scramble to find a new location while bearing the cost of advertising the new location and relocating. You may end up losing a significant amount of business in the entire episode.
You can include generous grace periods within the commercial lease agreement to protect your business interests as a tenant. The landlord can be required to mitigate any damages incurred if they breach the contract.
Don’t hesitate in consulting with an experienced attorney if you believe that the business contract has you all set up to fail. You are essentially running a business and any negative press can harm your future prospects.
Mitigation or working with an attorney may help in arriving at an agreed solution if you are accused of breaching the lease.
Disputes Related to Tenant Eviction
When relationships with your landlord become strained to the point of eviction, you should immediately consult with an attorney. There are certain laws in place dictating the rights of a lessee when a commercial rent agreement is breached. Working with an attorney usually produces preferable results to accepting an eviction.
Use the Legal Provisions to Your Advantage
Business clustering occurs when a certain type of business attempts to capture a greater portion of the market share in a particular location. This may work for certain businesses but is not always a prudent idea.
This is especially true in the case of small-scale businesses. For instance, if you have a small mom-and-pop grocery store, you probably won’t last long if a major chain moves in right next door.
You need to use provisions within the commercial lease agreement to prevent this from happening. These provisions define how the tenant is going to use the premise. It also limits the type of tenants permitted to lease adjoining spaces.
Personal Guarantees in the Lease
Landlords require commercial tenants to provide a personal guarantee. You don’t need to worry about exposing personal assets, such as your home to the landlord and creditors in case you default on the lease agreement if you have positioned the business as a separate corporation. Corporate business entities essentially remove the need for personal liability protection.
Owners can be held personally liable for the damages incurred to the lessor if they default on the lease. This is for the entire term of the lease, including the attorney’s costs, fees, and defenses.
Tenants should be careful in agreeing to provide personal guarantees. You should try and negotiate limitations to potential damages if a default occurs.
Get the Right Legal Guidance from an Experienced Commercial Real Estate Attorney
The knowledgeable attorneys at Birmingham Law Group can review the commercial lease agreement to ensure it contains all the necessary legal protections. When the stakes are high, you need the best legal advice from our competent business lawyers. To schedule your free initial consultation, call us at (205) 964-9764 or fill out this online contact form.