An individual who owns and leases real estate for use as a business is known as a commercial landlord. This person has the ability to manage a variety of property types, including rentals for:
- Shared office space
- Salon booths
- Retail
- Industrial
- Storage
- Hotels and other lodging establishments
- Mixed-use spaces
- Special purpose lands
The length of time you are permitted to occupy the property is outlined in nearly all tenancy agreements. You have the right to operate your business for that amount of time under commercial landlord-tenant laws unless you break the agreement.
The landlord cannot remove you from the property without a valid reason. Most state laws demand that a landlord give you a 30-day written notice if the contract does not include an expiration date.
Anyone renting a space has a right to privacy, whether they’re using it for business or for themselves. As long as your actions are legal, you are free to do whatever you want on the property.
The landlord is not allowed to stop you from running your business or from letting clients or customers on the premises. In the same way, if the landlord or lease owner wants to enter the property, they must first get your permission and give you so-called “reasonable notice.”
However, the majority of tenancy agreements stipulate that tenants cannot unreasonably refuse to grant access to the property. The law generally permits landlords to enter without permission in emergency situations.
The majority of businesses don’t own the land on which they operate. Instead, they typically lease their office or business space from a commercial real estate landlord. A commercial lease agreement, which outlines the precise conditions of usage for the property, is the name of the rental contract between the business and the property owner.
Due to the dynamic nature of corporate operations, many commercial leases tend to be flexible. Other lease arrangements may be more long-term, particularly for companies with a solid track record in their industry.
When Are Rights Given to Landlords?
Commercial lease laws determine the commercial landlord-tenant rights. For instance, this is the time to discuss who will pay for building repairs—the landlord or the tenant. Other conditions negotiated in a business lease include:
- Length of the tenant’s lease on the property
- Amount and deadline for tenant rent payments
- A choice to extend the lease
- What transpires if the lease is ended before its expiration
- What transpires when tenants upgrade the building
- Acceptability of sublease and assignment
A sublease is an agreement to rent space between a tenant and another party. The previous tenant vacates, and the new tenant assumes all of their duties. Usually, it lasts only a short while.
A sublease agreement is similar to an assignment. The distinction is in the temporal frame. The old tenant’s business lease is transferred to the new tenant.
What Are Commercial Landlord Rights?
State by state differs in the specific rights that a commercial landlord may have. There are, however, some rights that apply to all business landlords. These rights consist of the following:
- Obtaining rent in a timely manner
- Enforcing all lease conditions
- Requiring a lessee to care for the property so that damage is prevented
- Getting the premises back in your ownership once the lease expires
- Getting the lessee’s security deposit
- The lessee is being sued for contract violations
A commercial landlord must ensure the property they rent to a business tenant is appropriate for operations, just as a residential landlord must ensure a residential home is habitable. Commercial landlord responsibilities include:
- Making the required structural corrections
- Observing building code requirements
- Ensuring that building issues don’t interfere with the tenant’s operations
- Maintaining the details of the lease
Regardless of the state, commercial landlords are permitted to give their tenants more responsibilities than residential landlords do. Before signing your commercial lease, thoroughly examining its terms is a good idea. Residential leases infer a lot of tenant rights. Unfortunately, commercial leases don’t work like this.
You should therefore want specific language outlining your rights and obligations. Under the right conditions, commercial landlords might be amenable to negotiations, especially if your company is well-known and trustworthy. It doesn’t hurt to request a modification of certain lease terms that heavily favor your landlord, even if your company isn’t well-known.
Habitability
The absence of a warranty of habitability is a distinguishing feature of commercial leases. In residential leases, it is assumed that a landlord guarantees that the premises are habitable, even if this is not expressly stated.
This means that it is the landlord’s responsibility to maintain the premises so that they are suitable for habitation. Landlords frequently release themselves from obligations under commercial leases, including providing hot water and repairing leaks.
Business tenants, unlike residential tenants, typically do not have the right to deduct maintenance and repair expenses from their monthly rent.
Business tenants typically bear the cost of making most internal repairs, but this need not be the case for structural repairs. In other words, you need to make sure that the cost of structural repairs is not transferred to you by your commercial lease.
Trade Fixtures
Business tenants typically have to attach objects required for conducting business in order to improve interior spaces. For instance, store owners could have to construct storage and changing areas.
Whether you spend a lot of time and money installing them or not, these enhancements often belong to the commercial landlord. Trade fixtures are the one area where this regulation does not apply.
Generally speaking, trade fixtures are considered to be the property of a business tenant, and as such, a business tenant has the right to remove trade fixtures upon the expiration of their lease.
However, since the term “trade fixtures” is a little ambiguous, you should make sure that your business lease outlines which attachments you are permitted to remove when you leave the property.
Real Estate Taxes
Landlords may try to make the business renter pay different forms of taxes assessed against the commercial property in commercial leases. These taxes could include franchise tax in addition to federal, state, and local income taxes.
Make sure your landlord specifies the kind of taxes you’ll be accountable for before you sign a commercial lease. You also have the right to request that any clause in the lease that purports to hold you liable for future taxes be removed. In other words, you can make sure that your liability for some taxes ends when your tenancy expires.
Termination and Transfer
Commercial leases frequently contain clauses giving the landlord the authority to end the agreement and move the tenant. The landlord may have the power to relocate your company to a different area of the same building or to a new building entirely.
Before signing a lease, prospective business tenants can request a revision of the relocation terms. For instance, you should request provisions that make the landlord responsible for relocation charges, such as moving expenditures and fixture installation, if relocation clauses don’t indicate who pays for relocation costs or whether the new location must be equivalent.
Should I Consult a Real Estate Attorney about Commercial Landlord Rights?
Regarding commercial leases, both landlords and tenants have obligations. Contact a real estate attorney to learn more about your commercial landlord rights. A lawyer will assist you as you negotiate a lease and resolve any claims of breach of contract.
