• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar

Daniel S. Gonzales

What you need to know about Commercial Real Estate | 408.280.0535

  • Home
  • About Daniel S. Gonzales
  • Documents of interest
  • Blog

A Primer on Commercial Leases for New (or Not So New) Commercial Tenants

February 27, 2014 by Daniel S. Gonzales Leave a Comment

 Primer on Commercial LeasesCommercial Leases Are Different; Make No Assumptions.
A prudent prospective tenant should review a lease carefully to determine whether its business needs will be met.  As California law grants certain rights to residential tenants not given to commercial tenants, it is important for a commercial tenant to recognize those differences in order to assess the terms of the proposed lease.  The terms of the lease are critical.

Common Lease Terms.
A commercial lease should deal with the following issues:

  • Proper identification of the parties and the premises.
  • Permitted use of the premises.
  • Length of the term.
  •  The amount of base rent and any formula for rent increases.
  •   Responsibility for maintenance costs, real property taxes, utilities, insurance and operating expenses (the “triple net lease”).
  • Security deposit/personal guaranties.
  •  Improvements, alterations, and repairs, and responsibility for code compliance (e.g., ADA)
  • Payment for and ownership of trade fixtures.
  • Access rights and hours of operation (including HVAC).
  •  Signage rights.
  •  Landlord’s right of entry.
  • Insurance and indemnity obligations.
  • Extension and purchase options.
  • Sublease and assignment rights.
  •   Termination rights.
  • Breaches and remedies.

Negotiation of Economic Terms and Other Lease Provisions.
Everything in the lease is negotiable.  Don’t be afraid to ask for the specific lease provisions you want, and don’t just focus on the amount of rent.

Due Diligence and Execution.
Don’t sign the lease until you have had the opportunity to review every single aspect of the premises to your satisfaction.  Once the lease is signed, you have no right to back out unless that right has been specifically granted to you in writing and you have met the specific terms for the exercise of that right.

What To Do If Problems Arise.
The first rule is:  REMAIN CALM.  The second rule is to review the terms of your lease to determine how those problems are dealt with.

Filed Under: commercial leases, Commercial Tenants, tenats rights

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Search

Sign up for Updates

  • Hidden
    MM slash DD slash YYYY
  • This field is for validation purposes and should be left unchanged.

Helping you avoid risk, maximize profit, and protect your long term real estate appreciation

Mr. Gonzales is in private practice, providing representation, advice and counsel in complex real estate, corporate, and business transactions on behalf of public and private institutions, businesses, and individuals.

This material has been prepared by Daniel S. Gonzales for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Neither delivery nor transmission of this material or the information contained herein is intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship. The reader should not rely upon this information for any purpose without seeking legal advice from a licensed attorney. The information contained in this material is provided only as general information and is not promised or guaranteed to be correct or complete. Daniel S. Gonzales expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this material.

Recent Posts

  • Protracted legal odyssey ends in victory for Lafayette housing development
  • Is CEQA being weaponized against housing development?
  • Can tech automate commercial lease management? Stay tuned
  • Prolific ADA Litigant Shelved?
  • Prop. 15:  Time to switch off the “third rail” of California politics?
Copyright © 2023 Daniel S. Gonzales