Signing a commercial lease is often a more significant commitment than signing a residential lease. Typically, residential leases either go month to month or last for one year. Commercial leases, on the other hand, often last anywhere from three to five years.
If you find yourself unable to remain on the property, you may be financially responsible for the remaining rent for that period of time. A commercial lease is similar to a residential lease. That is one reason why it's important to understand the terms of a commercial lease before signing it.
Generally speaking, your landlord has a responsibility to maintain the facilities in a manner that is safe for you and for your employees and customers. When your landlord will not uphold their end of the rental agreement, you may need to take legal action.
You probably already pay for maintenance
In residential real estate, landlords generally include the costs of maintenance and estimated annual care in the rent amount. When it comes to commercial leases, the costs to maintain the property are often separate from rent. In addition to the monthly rental amount, commercial tenants usually have to pay common area maintenance fees, also known as CAM fees.
These extra costs go to maintaining shared spaces, including sidewalks, parking lots and even reception areas in shared office buildings. You paid for maintenance, and your commercial landlord should ensure that the property and common areas remain safe and habitable for all tenants. Depending on the severity of the maintenance issue, there may be many different options.
Dealing with non-compliant commercial landlords
When a landlord fails to uphold their end of a rental contract, you have legal options for recourse. The simplest and most common is likely holding funds in escrow. When a tenant does this, they withhold rent or a portion of their rent and deposit it into a specialized escrow account.
The funds must be available in an escrow account in order for the tenants to avoid legal complications from not paying, such as eviction. Holding funds in escrow is a great option when your landlord is simply delaying necessary repairs. Missing out on a portion of rent can be enough to motivate your landlord to make the necessary repairs or perform maintenance.
However, sometimes maintenance issues, such as an inaccessible parking lot, can keep your business from operating successfully. In that situation, you may have to take your landlord to court to secure the necessary repairs. You may even have to hold them accountable for financial losses if your business suffers consequences for that failure of maintenance.
Each rental contract is unique, and repair and maintenance issues are complicated. Before you take legal steps, you should speak with a commercial real estate litigation attorney who understands state law and your rights as a commercial tenant.