What You Should Know as a Commercial Landlord

by | Dec 11, 2015 | Business Litigation

Becoming a commercial landlord is a great investment opportunity and may allow you to pursue additional investments as time goes on. And even though leasing commercial space to tenants has its benefits, there are also some things consider carefully.

If you are a commercial landlord, or if this is a business opportunity you are considering, then here are some things you should know first…

The Devil is in the Details

Every commercial landlord-tenant relationship starts with a lease. As the commercial landlord, you are in a better bargaining position, generally speaking. If you have a hot property that you think you should have no trouble renting, you can include terms that are as favorable to you as you wish.

If you really need to get a tenant into your space quickly, you may have to include more tenant-friendly terms. Whatever the terms and conditions you wish to negotiate and include in your commercial lease – spell them out in detail! It is best that both parties know exactly and unequivocally what is expected of each side. Do not be ambiguous in contract language. Work with an attorney to ensure your lease says what you want it to say from the start.

Duration and Timing

Commercial leases are typically for longer durations than the standard one-year residential lease. This is because you, as a commercial landlord, probably do not wish to locate a new tenant every year. Similarly, your commercial tenant probably wishes to find a home for his or her business for longer than a one-year period. But, be careful about making the duration of the lease too long. If you and your tenant do not make a good match, you do not want to be stuck in a lease that doesn’t expire for several years.

Make Sure You Know About Your Potential Commercial Tenant

Many tenants wishing to rent commercial space are seasoned pros who are expanding their businesses and looking for bigger space. Typically, these types of tenants are doing well, are creditworthy, and have a history of paying their rent on time. Other times, potential tenants are just starting out and have not yet proven they can generate the type of income necessary to pay their rent. Conducting background checks, particularly credit checks, is a good way to weed out potential “problem tenants” before you enter into a lease agreement with them.

Know the Rules and Regulations Regarding Commercial Property

Both commercial tenants and landlords are subject to premises liability, as well as environmental and safety rules and regulations. You want to be sure you know what is taking place on your property so that you can ensure you are complying with all applicable federal, state, and local laws. If you have any questions about what you are liable for, contact a business litigation/commercial real estate attorneyto discuss the issue in more detail.

Consult with a Business Litigation Attorney

There are many things to consider and be aware of as a commercial landlord. Whether you are deciding whether to purchase commercial property, entering into a commercial lease, or potentially evicting a commercial tenant, you should work with a business litigation attorney to discuss your rights and obligations. Don’t wait until a problem happens before planning for a solution!

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