Signing a commercial lease is a more flexible solution than purchasing real property for a business. In some cases, commercial leases may impose surprising obligations on tenants.
Business leaders preparing to sign new commercial leases may need to review the documents carefully for two key concerns related to maintenance.
Who performs the maintenance?
In commercial lease scenarios, either the landlord or the tenant might have a contractual obligation to maintain the rented space. Some tenants assume responsibility for all maintenance and repairs.
Other times, landlords only make them responsible for certain maintenance issues. In certain arrangements, such as an agreement to rent a single unit in a retail park or a large office building, the landlord may assume most maintenance responsibilities. In that case, the tenant likely pays for maintenance services.
Are the costs fixed or variable?
When evaluating the maintenance costs integrated into a commercial lease, tenants need to look carefully at the language used. If the landlord assesses common area maintenance (CAM) fees, the tenant might pay a set amount every month. Other times, they might be responsible for a specific percentage of the overall maintenance and repair costs incurred in any given month.
In some cases, tenants may be able to negotiate lower maintenance costs because their proposed use of the space may generate less wear than larger or more customer-oriented businesses might. Other times, the fees or maintenance responsibilities included in a lease might make it clear that the space is not the right option for the business.
Maintenance responsibility and costs can be key considerations when preparing to lease business space. Having support when negotiating commercial lease terms and reviewing documents with a skilled legal team can help business owners avoid unfavorable commercial lease arrangements.