Top 10 Commercial Real Estate Articles
If you have a business, it needs a place to live. Be it a storefront or an office building, the real estate you choose for your business will have a huge impact on your daily operations.
The following articles from the LegalMatch Law Library can help you become familiar with important legal issues involving commercial real estate.
At the core of any real estate transaction is a contract. Deals related to commercial real estate usually involve large sums of money, so contracts are important to protect the parties’ interests. Start with this article to understand some of the terms that go along with commercial real estate contracts.
This article contains an overview of issues relating to the big question of whether to buy or lease space for your business. Some factors you may be considering are the type of business you run, your future growth plans, and access to cash and/or credit.
Do you know the differences between commercial leases and residential leases? One main difference is that commercial leases tend to have a lot more flexible terms that can be negotiated and worked out between the parties. Read this article to find out about other terms in your commercial lease.
Commercial leases tend to be for a period of years. That means they are for five, ten, or even 25 years. If a tenant wants to get out of the lease before it expires, one way may be to assign it to another new tenant who takes over the rest of the lease. Another way is to sublet the property for a period of time. Find out about legal issues with subleasing or assigning a commercial lease in this article.
Many real estate leases contain an approval clause, which states that a landlord must give consent to a tenant wishing to sublease or assign their lease as long as it is reasonable. This way a tenant will not have to forfeit their lease just because a landlord doesn’t want to go through the process of subleasing or assigning the property. The landlord must give a reasonable objection for not consenting.
Breaking a lease before it is due to end is a breach of contract. Technically the tenant is liable, but may not be charged for the remaining portion of rent if he or she follows certain procedures. For example, if the lease has a clause allowing for early termination, the tenant should follow the procedures in the clause.
The implied warranty of suitability grew out of the implied warranty of habitability in residential leases. As a landlord must guarantee (or warrant) that a home is livable, a landlord must warrant that a commercial space is a suitable place in which to work. A landlord may be liable if he or she breaks the implied warranty of suitability by not fixing defective services like sewage, electricity, or air conditioning.
If there is a problem with the premises, it could make doing business very difficult. Landlords generally have a duty to repair defects with the premises, however there is no guarantee that they do it as fast as you may need it done. Read this article to find out what kinds of terms you and your lawyer can negotiate concerning the duty to repair.
A fixture is a removable piece of property that is a part of the real estate. Since commercial leases cover business premises, fixtures usually have to do with the trade practiced of the premises. If the tenant attaches a piece of property to the property, he or she may have to leave it there when the lease ends.
A "holdover tenant" refers to a tenant that continues to occupy the premises after his or her lease is finished. Sometimes holdover automatically results in a new tenancy, but because commercial leases are for long periods of time, it is not like a residential lease that just converts to a month-to-month tenancy.
Bonus: Now that you have learned some of the basics about commercial leases, find out how shopping center leases are different that traditional commercial leases.