As the owner of a Florida commercial property with multiple tenants, you know that the lease agreement that you and each of your tenants sign will determine the terms you both have to follow, whether for a short time or an extended period.
There’s no such thing as a “boiler plate” commercial lease – at least not one that will work well for both parties. Just as tenants are unique, your lease agreements with them will likely vary somewhat in their details. Smart tenants will negotiate various terms, and smart landlords will be willing to negotiate – within reason – to attract the best tenants to their property (and keep them).
With that said, there are certain components that need to be addressed in all commercial leases.
Commercial lease type
This base contract type determines what the tenant is responsible for paying for. The most common is a gross (full service) lease. With this arrangement, the tenant is only responsible for paying rent. The landlord covers property taxes, insurance and maintenance costs. Single, double and triple net leases give tenants responsibility for paying one or more of these other expenses. There are other options as well.
It’s important to include a section that addresses renewal or extension options and requirements. This can help both parties better plan for the future. Among the specifics to include are how early a tenant must request renewal and how soon you must give notice if you’re not letting them renew.
Your agreement needs to have a section dealing with who is responsible for doing repairs of individual spaces. It’s important to be clear on what kinds of repairs are the responsibility of the owner (for example, roof repairs) and which are the tenant’s responsibility. Things like plumbing can be a source of dispute, for example. You’ll also want to specify what kinds of changes and upgrades can be made by a tenant without approval of the landlord and which require permission. For example, you’ll want to have a say in any upgrade or renovation that permanently changes the space.
Having a legally solid and clearly worded commercial lease in place can significantly lessen the potential for disputes that can become costly and time-consuming legal battles. With sound legal guidance, you can better draft, negotiate and enforce your agreements.