Leases: Residential, Commercial & Agriculture

Leases: Residential, Commercial & Agriculture

MHR Law prides itself in having the knowledge and expertise to ensure your rights are protected in a tenancy relationship. We assist both landlords and tenants to ensure rights and obligations are clearly defined.

Residential Tenancies

Residential leases are subject to special rules, mainly to protect tenants. The Residential Tenancies Act sets out the basic obligations of the landlord and tenant, including how security deposits should be used, whether a landlord can charge an additional fee for pets and a tenant’s rights before eviction. If you rent out a residential space as a landlord or tenant, it is important that you understand your respective rights and obligations and that your rental arrangement is properly documented for later reference.

MHR Law acts for both residential landlords and tenants in all matters, from drafting and reviewing residential tenancy agreements to representing clients during an eviction proceeding or at termination of a rental arrangement.

Commercial Leases

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 really is no “standard” lease agreement, and 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.

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.

What should be included in a lease?

The content of commercial and other leases is dictated entirely by the parties’ agreement and negotiation. Commercial leases should include provisions that cover at least 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
  • Insurance
  • Taxes
  • 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.

Leasing for Landlords

As a landlord, your land and building is your business, and in order to protect your investment, you need a comprehensive and favorable lease. By default, a lease gives the tenant exclusive use and possession of that property for the duration of the term. Unless the lease says otherwise, you cannot even enter the premises without your tenant’s consent! The length of lease agreements is closely related to the desire of landlords to maintain some control over what happens in their buildings.

Landlords typically prepare and present a lease to a potential tenant. This ensures the lease addresses their best interests. A good lease provides certainty that the tenant will pay rent for a specific length of time, and also allows the landlord to pass on most of the costs associated with operating the building. It will also set out how a landlord will go about removing a tenant if they are not paying rent or otherwise in breach of the lease agreement.

Leasing for Tenants

Where you do business is as important as how you run your business. A good lease will provide you with certainty about how long you can operate in your current location and what costs you will be responsible for while you are there. Understanding what you can and cannot do on leased premises is also central to how you will run your business now and in the future. Advance planning such as negotiating a comprehensive lease can help you avoid the myriad leasing issues that could crop up to hinder your operations.

As a business owner, you are working hard to grow and expand your business. Did you know that most commercial leases limit what types of business a tenant can operate on the leased property? You should have a keen understanding of whether – and under what conditions – you can expand your business on the same premises. It may even make sense to include an option to purchase the premises or a preferential right to lease additional square footage in the same building to ensure you have the physical space to grow.

You will also want to know how the lease addresses unexpected or long-term issues such as who will pay for a leaky roof or broken HVAC system, who owns improvements after the tenant has moved out, and what happens to the lease if the building is damaged, or either party goes bankrupt or ceases operations.

Enforcing a Lease

Enforcing a lease is not limited to evicting a tenant or terminating the lease. For instance, commercial landlords have a long-recognized “right of distress” to take possession of property on the leased premises in lieu of payment of rent. Tenants can protect themselves by registering the lease against the land or property at issue. This secures the tenant’s lease interest in the event the landlord or equipment owner fails to meet its obligations, decides to refinance the property or transfers it to a third party. A well-drafted lease should also provide alternative dispute resolution processes that landlord and tenant can turn to to sort out disputes.

MHR Law’s experienced Litigation lawyers can help if your landlord-tenant relationship has soured. They can help you understand what your rights and obligations are and guide you through the negotiation or litigation process to a resolution.

Agricultural Leases

There are a number of different types of leases that deal with agricultural land. From cash rent to crop sharing arrangements to grazing leases, these agreements need to address items that simply do not come up in a commercial lease.There are many terms that are need to be addressed in all leases:

  • Who the parties are
  • How rent is calculated and when it is due
  • Security deposits
  • The landlord’s options if the tenant fails to pay
  • The tenant’s options if the landlord fails to meet its obligations
  • Who pays and owns improvements to the leased premises
  • Insurance
  • Taxes
  • Restrictions and conditions on subletting

There are also many terms that are specific to a lease of agricultural land:

  • Permitted farming practices
  • Required farming practices
  • Maximum grazing capacity
  • Who is responsible for maintaining fences
  • Dower releases
  • Allocating revenue from oil and gas activity
  • Lumber removal from the property
  • Irrigation usage

Martinson and Harder understands the needs of farmers and ranchers and would be happy to help prepare your next lease. Call us to set up an appointment with one of our lawyers.