Understanding the Terms of a Commercial Real Estate Lease Agreement

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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In general, as a commercial tenant to a real estate lease, you have fewer legal protections than as a residential renter.  Furthermore, you are held to a higher understanding of the terms of your agreement and bear the responsibility of misunderstanding the commercial lease provisions.

Understanding Your Commercial Real Estate Transaction

Though laws are in place to protect you from unfair eviction as well as laws that mandate disclosure of known defects, for the most part, both you and your landlord set your own terms to the agreement. And, you are responsible for understanding the meaning of these terms. Ask questions and get terms spelled out. For example, if your lease states you are required to pay all taxes and you agreed to do so, and signed the agreement which incorporated this clause, you are held legally responsible for paying all taxes. If you are now told to pay the school district tax on the property, you are required to do so. The fact that you thought the landlord would pay this tax is of no consequence. There is no requirement on your landlord to tell you exactly what “all taxes” means. When you saw that clause, it was your responsibility to get a list of what exactly was included in “all taxes”.  

Getting Help

Consider using a lawyer before entering into a commercial lease agreement. An experienced commercial law attorney can help you draft a lease which incorporates language to protect you. The lawyer can also offer you clarity and point out any potentially poorly constructed lease provisions to avoid unpleasant surprises.

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