Whether you are a landlord or tenant, a lease agreement is a significant part of your business. A typical commercial lease agreement is between 20 and 30 pages long because it must capture every aspect of the leasing relationship. There is no “standard” lease agreement. Unlike residential leases, there is no legislation setting out what must be in a commercial lease. This means you and the other side can tailor your agreement as much as you wish. This is why is it important to have a lawyer looking out for your best interests when entering into a lease.
What should be in my lease?
The content of commercial and other leases is dictated entirely by the parties’ agreement and negotiation. Commercial leases should include provisions that talk about all of these crucial elements:
- Who the parties are
- How rent is calculated and when it is due
- What rent is for (square footage, access to common areas)
- Security deposits
- Who pays for utilities
- Who is responsible for services like snow removal, landscaping, parking, HVAC servicing, improvements and general maintenance in leased and common areas
- The landlord’s options if the tenant fails to pay
- The tenant’s options if the landlord fails to meet its obligations
- Limitations on the type of business that can be run from the leased premises
- Covenants against competing businesses on the same premises
- Who pays and owns improvements to the leased premises
- Restrictions and conditions on subletting
- What happens if either party goes bankrupt or ceases operations
Keep in mind there may be very different considerations if you are leasing a bay or unit within a building or a standalone building.
Our Business & Commercial Law lawyers at MHR Law can help you make sense of your lease agreement, help you negotiate a lease that is in your best interests and enforce your rights as a tenant or landlord.