Like with any business transaction, failing to have a written agreement or contract in place could put your rights at risk. This especially applies to businesses that rent the space they're in.
Failing to have a commercial lease agreement in place can make it challenging to claim your rights as a tenant.
Knowing what to include in commercial lease agreements can be challenging if you haven't seen too many before. In this blog, we'll discuss some of the various elements that need to be in these contracts.
What Are Commercial Lease Agreements?
A commercial lease agreement is a contract that states a business can rent a business property or office space from the property owner. "Commercial" refers to the tenant using the space for business purposes instead of living there.
Commercial tenants can include some of the following individuals:
- Sole proprietors
- Small businesses
- Multinational corporations
The main difference between commercial and residential lease terms is that commercial leases don't have many restrictions beyond normal contract law. Commercial leases can be customized to meet the needs of the landlord and the tenant. You need to carefully review any commercial lease you sign to ensure it contains what it needs to.
What Needs to Be in Commercial Lease Agreements?
While there are a few essential elements that need to be in an Arizona lease agreement, including two mandatory requirements. This includes:
- All local use restrictions, taxation issues, and zoning laws that affect the property
- Any material facts that interfere with the normal use of the property
Personal Information of All Parties Involved
The lease agreement should include a list of every party that's part of the rental agreement. This can consist of the following parties:
- Lessor
- Lessee
- Property managers
The landlord will also need to dictate how the tenant will use the property.
Description of Property and the Lease Term
The commercial lease agreement should contain the start and end dates of the lease. The lease terms should be written in years and months. Other information that should be listed is:
- Renewal terms
- How long renewals are permitted
- Limits on monthly rent increases
- Description of space
- Physical address
Penalties and Lease Rate
The contract should include the monthly payment for the space. It should state the due date for each payment, including where the payment is due and the accepted payment methods. The amount of late fees should be clearly illustrated.
The commercial lease agreement needs to include how much the security deposit was. The steps that the tenant needs to take to get their deposit back once they vacate the property should also be in the agreement.
Get Help Managing Your Commercial Properties With PMI Phoenix Golden West
Commercial lease agreements protect both the landlord and the tenant. Working with an experienced property management company and lawyer will ensure you protect your rights as a property owner.
The property management experts at PMI Phoenix Golden West are here to help you stay on top of your landlord responsibilities. Our team has been working with landlords for over 20 years, giving us unique expertise.
Contact us to schedule a consultation.
