{"id":15984,"date":"2020-06-30T11:11:00","date_gmt":"2020-06-30T18:11:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=15984"},"modified":"2020-06-28T13:38:34","modified_gmt":"2020-06-28T20:38:34","slug":"how-a-commercial-lease-differs-from-a-residential-lease","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2020\/06\/how-a-commercial-lease-differs-from-a-residential-lease\/","title":{"rendered":"How A Commercial Lease Differs from A Residential Lease?"},"content":{"rendered":"<p style=\"text-align: justify;\">If you\u2019re thinking about getting into a commercial lease, there are some important things to know.<\/p>\n<p style=\"text-align: justify;\">You want to get the best terms on your lease, and you want to ensure that you get any concessions from the landlord that you need to do business.<\/p>\n<p style=\"text-align: justify;\">For example, maybe you want to make sure you have commercial AC and heat window units in the property before you sign anything. If so, how can you negotiate this so that you aren\u2019t responsible?<\/p>\n<p style=\"text-align: justify;\">The following are some of the important things to know about a commercial lease and the negotiation process.<\/p>\n<p style=\"text-align: justify;\"><strong>How a Commercial Lease Differs from a Residential Lease<\/strong><\/p>\n<p style=\"text-align: justify;\">When you sign a commercial lease, you\u2019re likely going to have fewer protections than you would when signing a residential lease. The reason for this is that the law views commercial leases as contracts entered into by two business people. The idea that underlies commercial leases is that you should be able to negotiate the terms you want on a commercial lease.<\/p>\n<p style=\"text-align: justify;\">You will have more negotiating power as such, relative to a residential lease.<\/p>\n<p style=\"text-align: justify;\">A commercial lease is legally binding, tough to break, and there aren\u2019t standard forms. Since there isn\u2019t a standardized form, you\u2019ll need to go over every detail before you sign.<\/p>\n<p style=\"text-align: justify;\">A commercial lease will usually include the following components :<\/p>\n<p style=\"text-align: justify;\">\u25fe The type of property and the address<br \/>\n\u25fe The term of the tenancy<br \/>\n\u25fe There may be stipulations as to whether the tenancy is renewed periodically or is for a fixed term<br \/>\n\u25fe The rent payments and when rent is to be paid<br \/>\n\u25fe The type of business that can be done in the property<br \/>\n\u25fe Guidelines for lease renewal<br \/>\n\u25fe Signing incentives and landlord improvements<br \/>\n\u25fe Insurance provisions<\/p>\n<p style=\"text-align: justify;\"><strong>Is the Lease Right for Your Business?<\/strong><\/p>\n<p style=\"text-align: justify;\">Before you sign a commercial lease, is it right for your business and the needs of your business?<\/p>\n<p style=\"text-align: justify;\">You have to think not just about whether or not you can afford the rent, but the length of the lease is important. You don\u2019t want to be locked into a long five- or ten-year lease if you can avoid it, because the needs of your business can change over the years.<\/p>\n<p style=\"text-align: justify;\">If you can negotiate a shorter-term lease with renewals, that\u2019s usually best in a business situation.<\/p>\n<p style=\"text-align: justify;\">You\u2019ll also need to think logistically about how your business will operate in the space as-is and whether or not you will need to make changes.<\/p>\n<p style=\"text-align: justify;\"><strong>Common Commercial Lease Structures<\/strong><\/p>\n<p style=\"text-align: justify;\">There are certain ways commercial leases may be structured and terms to describe these. Some include :<\/p>\n<p style=\"text-align: justify;\">\u25fe Single Net Lease, Net Lease: In this situation, a tenant is responsible for property tax and utilities, while the landlord holds the responsibility for maintenance costs as well as repairs and insurance.<\/p>\n<p style=\"text-align: justify;\">\u25feNet-Net : Also known as double-net leases, if you sign one of these agreements, you as the tenant are responsible for property taxes, utilities, and insurance premiums. The landlord is responsible for repairs and maintenance.<\/p>\n<p style=\"text-align: justify;\">\u25feTriple-Net : With this type of lease, as a tenant, you are responsible for all costs of the building but in most cases, the landlord is responsible for making any structural repairs.<\/p>\n<p style=\"text-align: justify;\">\u25feFull Service or Modified Gross Lease : In this scenario, the landlord and the tenant split structural repairs and operating expenses, including things like property taxes and common area maintenance.<\/p>\n<p style=\"text-align: justify;\"><strong>Read the Entire Lease<\/strong><\/p>\n<p style=\"text-align: justify;\">Before you sign a commercial lease, you should absolutely read every word of it. If you don\u2019t, you could find yourself in a difficult situation. There may be errors as well as terms buried in a lease that aren\u2019t favorable to you.<\/p>\n<p style=\"text-align: justify;\">You need to know what your obligations are, what your landlord\u2019s obligations are, and what you would need to do to terminate a lease.<\/p>\n<p style=\"text-align: justify;\"><strong>CAM Terms<\/strong><\/p>\n<p style=\"text-align: justify;\">A big issue with commercial leases that you may not be familiar with if you haven\u2019t signed one before is CAM. CAM stands for common area maintenance. You will probably have a percentage of the common area fees you\u2019re responsible for, based on how much of the building you rent.<\/p>\n<p style=\"text-align: justify;\">This can be one of the most confusing aspects of a commercial lease for people who haven\u2019t signed one before, and CAM can be expensive.<\/p>\n<p style=\"text-align: justify;\">CAM terms are one of the main areas you should negotiate. Finally, another term you may see is capital expenditures. Capital expenditures include something touched on above\u2014things like HVAC repairs or the addition of window units. It can also include the roof, the foundation, and other major replacements and repairs. You should make sure that as a tenant you don\u2019t sign a lease that puts this burden on you.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/realtybiznews.com\/what-to-know-about-a-commercial-lease\/98759194\/\" target=\"_blank\" rel=\"noopener noreferrer\">What to Know About a Commercial Lease?<\/a> by Jamie Richardson | Realty Biz News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re thinking about getting into a commercial lease, there are some important things to know. You want to get the best terms on your lease, and you want to &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2020\/06\/how-a-commercial-lease-differs-from-a-residential-lease\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-15984","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How A Commercial Lease Differs from A Residential Lease? &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2020\/06\/how-a-commercial-lease-differs-from-a-residential-lease\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"How A Commercial Lease Differs from A Residential Lease? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"If you\u2019re thinking about getting into a commercial lease, there are some important things to know. 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