Each year, thousands of Florida business owners enter into commercial leases. Renting operational space can be a positive investment for a growing business. However, not all commercial leases are created equally. If you are not careful, you could end up with an unfair or unreasonable agreement. Knowing how to develop an equitable commercial lease is crucial. Here is what you need to know about negotiating your Florida commercial lease.
Knowing the Local Standards for Your Commercial Lease
A typical Florida commercial rental agreement will set out the rights and responsibilities of a business owner and landlord. In some cases, the commercial lease terms will be fairly standard. In others, the details may vary according to the parties involved and the leasing location.
Before negotiating your Florida commercial lease, it’s essential to determine what terms are ordinarily used in this type of agreement in the proposed area. An experienced business attorney can help you negotiate terms that meet your needs and align with local leasing standards.
Your Commercial Lease Rate
As a Florida business owner, one of the most important factors you will negotiate will be the amount of rent you will pay. Some parties are willing to accept a lease where their rent increases each year. Others may choose to negotiate limits on how much the landlord can raise their payments. As you negotiate your commercial lease, you will need to consider questions such as: How much are you willing to pay? Do you need to pay the same amount for multiple years? What are the alternatives?
Another issue to consider is added expenses. With a residential lease, the landlord is usually responsible for paying taxes on the property as well as maintenance and repair costs. Commercial leases can be very different. Depending on the type of lease, you may be responsible for paying insurance, taxes, utilities, and repairs. It’s crucial to negotiate who will pay these and other added expenses during your Florida commercial lease term.
Before entering into a commercial lease, you will need to assess your current business needs, available capital, and what you anticipate being able to pay in the future. Your Florida business attorney can help you evaluate your short and long-term goals and negotiate a commercial lease rate that will meet your present and future requirements.
Changes to the Property Under Your Commercial Lease
Depending on your business, you may need to make structural and physical changes or additions to the leased space. However, you and your landlord may have different ideas and expectations about altering the commercial property. Therefore, if you expect to paint, add fixtures, or otherwise modify the existing commercial space, you will need to make certain that your right to do so is clearly stated in the commercial lease document.
Fixtures and Your Commercial Lease
After your lease terms ends, there may be a question about what added property is yours to take. For instance, some commercial leases allow the business owner to add fixtures to a property but specify that these attached structures will remain at the end of the term. Therefore, if you expect to add fixtures or other features to a leased space, you should consider what you are willing to leave behind when and if you vacate the property.
Use and Your Florida Commercial Lease
Commercial property owners sometimes seek to limit a lessee’s use to conducting a specific type of business. However, the landlord’s expectations may not comport with your existing and potential plans for the property. Therefore, before entering into your Florida commercial lease, you will want to consider how you intend to use the space now and in the future. For example, you may be opening a microbrewery where you plan to create and serve alcoholic beverages. Do you anticipate also having a restaurant or a retail store or online operation on-site? If so, you will want to make certain that you include language in your agreement that permits you to use the commercial property for these purposes.
Subleasing and Your Commercial Lease
Another issue that may arise is subleasing. Sometimes a business owner will rent a commercial space and unexpectedly need to close operations or move to a smaller location. Should something like this occur, the issue of completing the original commercial lease term can become complicated. If the lessee fails to pay and operate according to the commercial lease’s requirements, they could risk breaching the agreement.
One option may be for the business owner to sublease some or all of the commercially leased space to another party. It’s crucial that you find out if your Florida commercial lease allows for subleasing and if your agreement expressly prohibits this practice.
As a business owner, being able to adapt to changing conditions is critical. Therefore, you will want your lease to provide you with the flexibility to make changes regarding your use of the commercial space as your business needs require.
It’s important to negotiate clear terms regarding your Florida commercial property’s use so that you can avoid unnecessary disputes with the landlord down the road. A Florida business attorney can help you negotiate lease terms that plan for your possible use and protect your interests.
Your Florida Commercial Lease Term
Your lease term (how long you intend to use the space) will also be a crucial part of your commercial lease. If you expect to supply significant capital and need time to see a profit, a longer lease may be required. On the other hand, you may be involved in a higher-risk short-term venture that requires flexibility.
How long you need your commercial space is an essential term that will be important during your lease negotiations. While negotiating your commercial lease, you should consider issues such as: Whether the landlord will offer you an incentive to sign a longer lease; If it’s reasonable to ask for a short-term lease in the area where you want to set up operations; and how much time you need to realize a return on your investment.
How You Leave the Commercial Property
You and your landlord will also need to work out how you are expected to leave the property. For example, how close does the space need to be to its original condition? Do you have the same idea of what “original condition” means? The way in which this term is written will obligate you. Consequently, it will be vital that you make sure the language used in the commercial lease imposes reasonable expectations.
These are some of the terms and issues you will want to consider when negotiating your Florida commercial lease. However, every commercial lease is different, and what works for one business may not be suitable for another. Further, community standards may vary, and it can sometimes be difficult to determine if commercial lease terms are reasonable. Working with an experienced Florida business attorney is essential to negotiating your Florida commercial lease. Your counsel can help you examine your business needs and develop an equitable agreement that supports your operations now and in the future.
Contact an Experienced Florida Business Attorney
Experienced Florida business attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial lease issues, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.