In the state of Florida, a commercial lease agreement gives the landlord important paperwork to enter a rental agreement on his or her property. Commercial leasing is more complicated than a residential lease. It calls for careful handling during negotiations.

Before you enter into a commercial lease agreement, you need a thorough understanding of what you’re getting into.

1.    Legal Protection

Commercial leasing doesn’t have the same protection laws as consumer leases. When you sign a residential lease, there are usually several consumer protection laws that stop the landlord from carrying out certain actions.

When it comes to commercial leases in Florida, you won’t find the same level of protection.

2.    CAM Terms

You’ll find the term CAM in most leases. It stands for common area maintenance. Your lease should state what percentage of CAM fees you’ll be responsible for. The fee is based on what percentage of the building you rent. It should be based on the overall size of a building and it shouldn’t vary according to how much of the building is rented out at a time.

This is one of the most confusing sections in a commercial lease. Make sure you’re not compelled to pay for things that fall under the landlord’s legal fees or marketing efforts.

You should always negotiate the CAM terms, especially to avoid paying an administration fee of over 3% or paying benefits for the landlord’s employees.

3.    A Modified Gross Lease

If you enter into a modified gross lease, it means you are responsible for rent and other agreed-on expenses. These might include maintenance, services, and repairs.

It’s important to know what kind of lease you’re signing, who will be responsible for different payments, and what your total potential costs may be. You also need to know exactly how much space you’ll have for your business, who your neighbors are, and how long the lease is valid.

4.    A Net Lease

Should you enter into a net lease, you and the landlord will share costs, such as taxes, insurance, and building maintenance. There are different types of net commercial leases, including:

  • A triple net lease – where you pay for insurance, rent, taxes, and building maintenance
  • A double net lease – you pay for rent, insurance, and taxes
  • A single net lease – you pay property taxes and rent. The landlord covers the cost of utilities and maintenance

If you are to share the building with other tenants, you should know that whatever expenses you pay are based on your percentage of the building’s total size.

5.    Taking On a Sublessee

It’s common in commercial leasing to take on a sublessee. This is usually another business that works in your leased space and under your lease terms. You will still pay the lease, while the sublessee pays you a portion of your rent.

Plenty of landlords will not allow sublessees. But if you do want to share the cost with someone along the line, be sure to negotiate your commercial lease before you sign it.

6.    Termination of Commercial Leasing

Before you enter into a lease, be sure to negotiate provisions so that, should you need to terminate the agreement, you’ll be able to do so as effortlessly as possible. The commercial lease should make provisions for you to sublet the space if you’re unable to pay rent or if you decide to move as your business grows.

At the very least, your lease should allow you to transfer it if you sell your business. This allows the new owner to stay in the same location. Negotiate the penalties that you’ll incur should you terminate the lease, before settling on the agreement.

Commercial leasing in Florida can be a complicated process. With an experienced attorney on your side, you’ll be in the position to negotiate terms and have a full understanding of the lease before you sign it.

Book an appointment at Principal Law Firm to discuss your commercial leasing needs.

 

 

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