4 Common Commercial Lease Disputes (and How to Avoid Them)

A lease, be it commercial or residential, is arguably the most commonly type of contract entered into. Most businesses find it necessary to occupy a physical space (although more companies are going virtual). Compared to residential leases, though, commercial leases are more complex. Businesses are usually restricted in the activities they may conduct on the property, in addition to other terms that sometimes cause friction between the landlord and tenant. Four more common disputes are described below. 

  1. Disagreements over breaking the lease (early termination). Landlords overseeing commercial property are, of course, extremely motivated to collect rent that has been laid out in the lease agreement. Often, the company renting the space is on the hook for the rent due through the end of the contract. However, the landlord usually has a duty to look for another tenant as soon as the current one indicates they intend to terminate the lease. 
  2. Questions over who has a duty to repair things on the property. This is often a source of contention between landlords and tenants. While residential leases usually oblige the owner to make most of the repairs to the structure being rented, commercial leases have a reputation for swinging the other way. Commercial landlords are usually responsible for upkeep of the structural elements of a building, in addition to utilities like water and electricity. However, the rest is usually up to the tenant to fix. Defects in the structure are of particular concern for commercial tenants because they can have adverse effects on profits. 
  3. Ability for other parties not on the lease to use the property. Leases and zoning ordinances are usually very specific when it comes to the activities permitted on a piece of commercial property. For example, tenants must often get written permission to sublease the property. 
  4. Return (or non-return) of deposit. A deposit of a certain amount is common when a new tenant rents commercial property. There are stipulations attached to the deposit that dictate whether or not the tenant receives the deposit when they move out. This conflict can be amplified when the tenant is attempting to prematurely terminate the lease.

How to Avoid Disputes Over Your Commercial Lease

While litigation is always an option for commercial lease disputes (unless the agreement forbids going to court), it could be worthwhile to try to settle things through mediation, which is a non-binding agreement that is reached with the help of a neutral third party (mediator). The best way to avoid a dispute over your commercial lease, though, is to negotiate and sign a robust, effective lease agreement. 

Contacting an experienced real estate attorney is the best way to help ensure that you get a fair lease for your business. Reach out to our firm today at 305-227-4030 to see how we can provide value to your business.