A commercial lease is a binding agreement between a property owner and a business tenant. Business leaders sign leases to acquire office space, a retail shop or an industrial facility.
Business leaders often need assistance negotiating appropriate terms in their leases and enforcing those terms if the landlord does not voluntarily uphold them. What common commercial lease inclusions can lead to disputes between tenants and landlords because landlords do not uphold the lease as they should?
1. Force majeure clauses
Force majeure clauses allow for the early termination of a lease in unusual circumstances where the company cannot continue operating. Landlords may try to fight lease terminations under force majeure clauses, as they may want to demand payment for the remainder of the lease’s duration.
2. Exclusive use clauses
An exclusive use clause prohibits a landlord from leasing another unit to a business offering similar goods or services. If a landlord signed the lease with a new tenant that might diminish an existing tenant’s market share, they may need to contest the landlord’s decision to rent a nearby space to a similar organization.
3. Lease assignment closes
Provided that the lease allows for assignment, the tenant can locate another company to assume the remainder of their lease. Landlords sometimes interfere in this process in the hopes of compelling the current tenant to pay the remainder of their release and then securing additional revenue by renting to a new business.
Evaluating the circumstances that could constitute a breach of the agreement can help commercial tenants hold landlords accountable. Entrepreneurs and executives may need support when dealing with a dispute with the landlord over their refusal to uphold the terms included in the commercial lease.
