Commercial real estate laws from a tenant’s perspective are designed to protect tenants from landlords who may act in an unfair or illegal manner.
Here are a few examples of commercial real estate laws that may affect tenants:
- Rent control laws: Some jurisdictions have laws that limit how much landlords can increase rent over a certain period of time. These laws are intended to protect tenants from excessive rent increases and to ensure that housing remains affordable.
- Security deposit laws: Many states have laws that specify how landlords must handle security deposits and set limits on the amount that can be charged. These laws are intended to ensure that tenants’ deposits are returned promptly and with appropriate interest or deductions when they move out.
- Discrimination laws: Federal and state laws prohibit discrimination on the basis of race, sex, religion, national origin, disability, or other protected characteristics. Landlords are prohibited from denying rental housing or imposing different terms or conditions on the basis of any of these factors.
- Habitability laws: Commercial real estate laws require landlords to provide and maintain the rental property in a safe and habitable condition. Tenants have the right to a safe and livable space, and landlords must address any issues that may arise in a timely manner.
- Lease termination laws: There are laws that dictate how a lease agreement can be terminated, such as how much notice a landlord must give a tenant to vacate the premises or how a tenant can terminate the lease agreement if the landlord is in breach of the lease terms.
- Disclosure requirements: Landlords may have legal requirements to disclose certain information to tenants, such as the presence of lead-based paint in the property, or the potential hazards of natural disasters, to the tenants
- Retaliation laws: Landlords may not take retaliatory action against tenants for asserting their rights under the law, such as reporting a violation of the habitability laws.
Commercial real estate laws, from a tenant’s perspective, are designed to protect their rights and ensure that the rental property is safe and livable. Tenants should familiarize themselves with their rights under the law and seek legal advice if they believe their rights have been violated.
Bargaining Power in Tenancy Law
Bargaining power refers to the relative ability of each party in a negotiation to influence the outcome of the negotiation.
In real estate negotiations between a tenant and a commercial landlord, the bargaining power can be influenced by several factors, including:
- Market conditions: In a strong rental market, landlords have more bargaining power because they have a high demand for their property, and tenants may have to compete for space. In contrast, in a weak rental market, tenants have more bargaining power because landlords may be more willing to negotiate to fill their space.
- Tenant’s creditworthiness: Tenants with a good credit history and a track record of being responsible have more bargaining power than tenants with a poor credit history. Landlords are more likely to negotiate with tenants who have a good credit history, as they are seen as less of a risk.
- Size of the tenant: Tenants with a large footprint or high revenue potential are seen as more desirable tenants, and thus have more bargaining power in the negotiations.
- Lease terms: Commercial leases typically last for several years; tenants may have more bargaining power in negotiations when they are looking for short-term leases rather than long-term leases.
- Location: Tenants with multiple location options or with a flexibility of moving to another location, may have more bargaining power than tenants who are looking to lease in a specific location.
- Alternative space: Tenants with alternative space options, like the ability to sublet, or to expand or contract space as business conditions change, have more bargaining power than tenants who are dependent on the landlord’s property.
Reading a Commercial Lease
A commercial lease is a legal agreement between a landlord and a tenant that outlines the terms and conditions of the tenancy. Commercial property tenant rights contained in a commercial lease can vary depending on the jurisdiction.
However, here are a few examples of common rights that tenants have under a commercial lease:
- Quiet enjoyment: Tenants have the right to the quiet enjoyment of the property, meaning that the landlord is not allowed to interfere with the tenant’s use of the property.
- Repairs and maintenance: The lease should specify the landlord’s responsibility for maintaining and repairing the property. If the property is not kept in good condition, the tenant may have the right to make repairs and deduct the cost from the rent, or terminate the lease.
- Alterations: Tenants may have the right to make alterations to the property, with the prior written consent of the landlord. The terms and conditions for making the alterations should be specified in the lease.
- Subleasing: Tenants may have the right to sublet the property, with the prior written consent of the landlord. The lease should specify the conditions under which the tenant can sublet the property.
- Assignment and Binding Effect: The lease should also specify whether the tenant can transfer the lease agreement to another party or whether the lease is binding on the tenant’s successors and assigns.
- Exclusive use clause: The lease may contain an exclusive use clause which limits the tenant’s right to use the property to a specific business activity or the right to prevent other businesses from conducting the same activity within the building.
- Eviction: The lease should specify the conditions under which the landlord can evict the tenant, such as for nonpayment of rent or breach of the lease agreement.
How Can Commercial Lawyers Help with Rights?
Commercial lawyers can help with commercial lease rights in several ways:
- Drafting and reviewing lease agreements: An attorney experienced in commercial leasing can help you draft or review a commercial lease agreement to ensure that it is legally sound and that your rights as a tenant are protected. They can advise you on the terms and conditions of the lease, such as the duration of the lease, rent, and maintenance obligations, and any restrictions on the use of the property.
- Negotiating lease terms: A commercial lawyer can help you negotiate the terms of a commercial lease with the landlord to ensure that they are fair and favorable to you. They can help you negotiate favorable terms such as rent, lease duration, rights to renew or terminate, and any other terms that are important to your business.
- Enforcing tenant rights: In case the landlord breaches the lease agreement or fails to fulfill their obligations, a commercial lawyer can help you enforce your rights under the lease agreement and seek remedies, such as making repairs or terminating the lease.
- Assisting with eviction proceedings: If the landlord seeks to evict the tenant, a commercial lawyer can help the tenant understand their rights and the legal process and represent them in court to ensure that the eviction is conducted in accordance with the law.
- Helping with disputes: Commercial lawyers can also help resolve disputes that may arise between the tenant and the landlord, such as disputes over repairs, rent, or eviction. They can help you negotiate a resolution or represent you in court if necessary.
Having a commercial lawyer representing you in commercial leasing matters can provide legal protection and guidance and increase the chances of obtaining favorable lease terms
Do I Need an Attorney for My Commercial Lease?
It is not strictly necessary to have a real estate attorney for your commercial lease, but it is highly recommended. An attorney experienced in commercial leasing law can help protect your interests and ensure that the lease is legally binding and enforceable.
An attorney can review the lease agreement and advise you on the terms and conditions, such as rent, length of the lease, rights to renew or terminate, and any other terms that are important to your business. They can also help you negotiate favorable terms, and ensure that your rights as a tenant are protected.
Additionally, an attorney can assist you with understanding and enforcing your rights in case the landlord breaches the lease agreement or fails to fulfill their obligations, and represent you in court if necessary. They can also help you with disputes that may arise between you and the landlord and advise you on the local laws that apply to the commercial leasing.
In summary, having an attorney review or draft your commercial lease can provide added legal protection and ensure that your rights and interests are protected, especially when dealing with complex legal documents, and could save you from potential legal disputes and financial losses in the future.