If there are major defects in the premises of your company or store, it can have very adverse consequences on your business. At worst, you will be forced to shut down the premises and bring your business to a halt while these defects are remedied.
Do Standard Commercial Leases Give a Tenant Much Protection?
Typically, standard commercial leases don't afford the tenant much protection when a defect in the premises threatens the continuance of business. The landlord will be given the responsibility for fixing any defects in the structure of the building (roof and exterior walls) as well as electricity, water, and any other utilities. If one of these things happens to break, the tenant must notify the landlord of the defect and the landlord will have a specific amount of time (usually around a month) to respond.
Does a Standard Commercial Lease Ensure that Your Business Won't Be Harmed by Unresolved Repair?
The problem with this kind of provision is that it does not provide much guarantee that the defect or repair will not impact the tenant's business in a negative manner. While the landlord has to respond to the tenant's notice of defect within a month, he generally does not have a fixed period in which the defect has to be completely fixed.
What Sorts of Provisions are in Most Leases Regarding a Landlord's Liability for Failing to Fix Broken Items?
There are commonly provisions in the lease that say the landlord cannot be held liable for any adverse affects to the tenant's business as a result of the defects. The tenant may even have to continue paying rent regardless of the defect (even if it results in the destruction of the building).
What Kind of "Duty to Repair" Terms Should I Aim for as a Tenant in a Commercial Lease?
It is important to make sure that if anything goes wrong with the premises where you operate, that your business will still be able to function, and that you are compensated at the very least if it cannot. The following is a short list of things to do to make sure your business continues running smoothly.
- To make sure that any defect in the premises is repaired in a timely manner, you want to put a provision in the lease that says the tenant is allowed to have the repair fixed herself, and then be compensated by the landlord either directly or through a proportionate deduction in the rent payment.
- Negotiate with your landlord to put a provision in the commercial lease that he is liable for any loss your business experiences due to a defect in the premises. This will ensure that your landlord will be motivated to make fixes to any problems you have reported about the building as soon as possible.
- Negotiate a provision that will allow for a rent reduction for the period of time the defect remains. This will provide more motivation that the landlord will want to fix any defect, no matter how minor, as soon as possible
Who Can I Get to Help Me Negotiate Terms in a Commercial Lease?
You will probably want to consult a real estate attorney who has experience with commercial leases. Your attorney will be able to help you understand in plain terms what each term in the contract means, and can help ensure that your interests as a tenant will be properly represented in the lease agreement.