Business executive Kenneth Loeb recently discussed everything you should know about commercial leases.
A commercial lease can determine whether a business succeeds or fails. In fact, many business owners are unaware of just how different commercial leases can be from residential leases. Business executive Kenneth Loeb recently discussed what business owners should understand before signing a commercial lease.
“Commercial leases are typically more binding than residential leases, so tenants need to fully investigate their leases before signing,” Kenneth Loeb said. “I always suggest that a business owner meets with a lawyer to fully review a commercial lease before deciding on renting the property.”
Kenneth Loeb explained that commercial leases are considered legally binding contracts. They’re not as easy to break as residential leases and are typically designed to suit the needs of the landlord. Commercial leases are not typically created from standard forms like residential leases are, so they can be more difficult to decipher.
Kenneth Loeb added that commercial leases are not subject to the same consumer protection laws as residential leases. For instance, there are no regulations protecting the privacy of the business owner, and there are no limits on security deposit amounts. Kenneth Loeb insisted that it’s important to understand the cost of the security deposit as well as the conditions for receiving the deposit back when the lease has expired.
“While commercial leases are generally more binding than residential leases, they’re often negotiable as well,” Kenneth Loeb said. “Tenants understand that business owners may need to make adjustments to help the space suit their needs, and they’re often willing to do so for quality, long-term tenants.”
Kenneth Loeb explained that there are other aspects of renting a commercial property that business owners should take into account. For instance, they should know where signage can be placed throughout the property and who will pay for adjustments and repairs made to the space. Kenneth Loeb recommended that if a business owner plans to rent a space in a complex, they should understand if the lease prevents the landlord from leasing a nearby space to the competition.
“There are so many things to consider when signing a commercial lease, from the amount of the rent to the duration of the lease, and whether that lease can be renewed,” Kenneth Loeb said.
He reiterated that a business owner should always meet with a lawyer to review the contents of the lease. A qualified contract lawyer is able to identify gray areas and fine print and relay them to the business owner in layman’s terms. Fully reviewing the lease and understanding its contents could be the difference between a business experiencing success or failure.
