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What red flags should you look out for in a commercial lease?

On Behalf of | Feb 16, 2022 | Uncategorized |

A Florida commercial lease often has a longer duration than a residential one, so when the time comes to sign one, you want to make sure you have a comprehensive understanding of everything it entails. Commercial leases are often full of “legalese,” but failing to do your due diligence could come back to bite you later on.

According to CBI Commercial, there are certain elements or clauses that you may find in a commercial lease that might make you want to think twice about signing it. Think hard before agreeing to sign a commercial lease that contains any of the following.

Vagueness

Commercial leases must be clear and direct to be effective. If you find anything in the lease agreement to be open to interpretation, consider this a red flag. Anything a lease leaves open to interpretation could wind up becoming an issue in court later on.

Tax escalation provisions

A tax escalation provision says that you must pay more in rent when the tax rate of your property goes up. These clauses are not uncommon. However, you want to review yours to make sure it is fair and that you are making an increased payment that is proportional to the size of the space you occupy.

Overly lengthy renewal clauses

Most commercial landlords benefit when they have long-term tenants because they do not have to waste time finding new ones or having their spaces sit open. Yet, you may want to think twice before signing a lease with a renewal clause that exceeds two years.

The language and contents in a commercial lease are often complex. However, failing to understand everything your lease agreement entails may lead to costly and timely legal trouble down the line.