Commercial lease disputes arise from disagreements between landlords and tenants regarding lease terms, rent payments, property maintenance, or lease termination. These disputes can disrupt business operations and have significant financial implications for both parties. Artemis Law Group is committed to safeguarding your interests by writing leases, reviewing preliminary leases, drafting and negotiating leases, and representing you during lease disputes.
Commercial Leases
What Are Commercial Leases?
Commercial leases are contractual agreements between landlords and tenants for the rental of commercial properties, such as office buildings, retail spaces, or industrial warehouses. Unlike residential leases, commercial leases typically involve more complex terms and longer lease durations.
These agreements outline the rights and responsibilities of both parties regarding rent payments, property use, maintenance responsibilities, lease duration, and other provisions.
Types of Commercial Leases
Net Lease
The tenant is responsible for paying a base rent along with additional expenses, such as property taxes, insurance, and maintenance costs. There are three main types of net leases: single net lease (tenant pays property taxes), double net lease (tenant pays property taxes and insurance), and triple net lease (tenant pays property taxes, insurance, and maintenance costs). Net leases provide landlords with predictable income while shifting some of the operational expenses to tenants.
Gross Lease (Full Service)
A gross lease, also known as a full-service lease, is a type of lease where the landlord covers all operating expenses, including property taxes, insurance, maintenance, and utilities. Tenants pay a fixed rent amount, and the landlord is responsible for managing the property and its associated costs. Gross leases are commonly used in office buildings and provide tenants with predictability in their monthly expenses.
Percentage Lease
A percentage lease is commonly used in retail properties, where the tenant pays a base rent plus a percentage of their gross sales revenue. This type of lease allows landlords to share in the success of the tenant’s business while providing tenants with flexibility in their rent payments based on their sales. Percentage leases often include a minimum base rent amount to ensure landlords receive a consistent income, regardless of sales fluctuations.
Common Reasons for Commercial Lease Disputes:
- Disagreements over lease terms and conditions
- Rent payment disputes or rent adjustments
- Maintenance and repair responsibilities
- Lease renewal negotiations
- Use of the property or permitted alterations
- Subleasing or assignment of the lease
- Compliance with zoning and regulatory requirements
- Property access and utility disputes
- Insurance and liability issues
- Termination of the lease agreement
How Artemis Law Group Can Help
Drafting, Reviewing, and Negotiating Leases
Our attorneys draft lease agreements tailored to your specific needs. We ensure all essential terms and conditions are clearly outlined, including rent structure, lease duration, maintenance responsibilities, and dispute resolution procedures. We examine lease agreements to identify ambiguities, inconsistencies, or unfavorable terms that may pose risks down the line and provide informed advice and guidance. When it comes to negotiation, we leverage our expertise to negotiate favorable terms on your behalf.
Handling Commercial Lease Disputes
We also offer comprehensive legal assistance during lease disputes. Our process begins with a detailed analysis of the lease agreement and the circumstances surrounding the dispute. We review lease terms, assess relevant legal documents, and identify potential areas of contention to formulate a strategic plan. Finally, we negotiate with the opposing party, aiming to achieve a favorable resolution through mediation or alternative dispute resolution methods. If litigation becomes necessary, our attorneys advocate vigorously for your interests.
Commercial Leases FAQs
What is a commercial lease, and how does it differ from a residential lease?
A commercial lease is a legal agreement between a landlord and a business tenant for the rental of commercial property, such as retail spaces, office buildings, or industrial warehouses. Unlike residential leases, which govern the rental of living spaces, commercial leases typically involve more complex terms, longer lease durations, and different legal considerations.
Can a commercial lease be negotiated, and what terms are typically negotiable?
Yes, commercial leases are often negotiable. Negotiable terms may include rent amount, term length, renewal options, tenant improvement allowances, subleasing rights, and assignment provisions. Working with a knowledgeable real estate attorney can help tenants navigate the negotiation effectively.
Can a tenant terminate a commercial lease early, and what are the potential consequences?
Early termination of a commercial lease by a tenant may be possible under certain circumstances, such as a breach of lease by the landlord, property damage, or unforeseen business circumstances. However, terminating a lease early without legal justification may result in financial penalties, loss of security deposit, or legal action by the landlord for breach of contract. Our real estate attorneys can review your lease terms and obligations to help you better understand your options and find a strategy to terminate the lease early.
Schedule Your Consultation
Schedule a consultation with our experienced real estate attorneys at Artemis Law Group. With offices in Los Angeles and San Diego, we provide personalized legal guidance tailored to your needs. Take the first step toward resolving your commercial lease disputes or concerns by booking your consultation today.
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