Philadelphia Commercial Lease Lawyers

This page explains what commercial leases are, how different lease structures allocate costs between landlords and tenants, and practical considerations for negotiating terms. It highlights essential clauses to include (rent, length, fees, responsibilities, and defined areas) and warns about the risks of personal guaranties for business owners. Freundlich & Littman, LLC assists with negotiations, disputes, and potential lease termination, offering free consultations.

What Is a Commercial Lease Agreement?

Similar to a residential lease agreement, a commercial lease agreement is a contract through which a tenant agrees to certain terms in order to rent property from a landlord. The difference between a commercial lease and a residential lease is that a residential lease is leased specifically for residential purposes, and a commercial lease is obtained for business purposes. The terms of a lease agreement will vary depending on the type of lease negotiated between the tenant and the landlord, meaning that the responsibilities of each party will depend upon the specific terms of the lease.

How to negotiate a commercial lease

There are various types of commercial leases which apportion costs between the landlord and the tenant differently (aside from rent).

Some leases require the tenant pay utilities and property tax, while the landlord remains responsible for maintenance, repairs and insurance. Others leave the tenant responsible for utilities, property taxes, and insurance premiums, while the landlord is responsible for maintenance and repairs. There are also leases which leave the tenant responsible for all building costs with the exception of structural repairs. Finally, and perhaps most commonly, some leases split the cost of structural repairs and operating expenses between the tenant and the landlord as “base rent”.

These details are determinative of who is responsible in the event that damage occurs to the leased space, and the tenant should carefully consider the trade-offs of each type of lease during negotiation.

Lease agreements are unique and can include many specific terms negotiated by the landlord and the tenant. It is important to consult a lawyer not only to discuss what type of commercial lease is best for you and how to negotiate that lease successfully, but also in cases where a dispute arises with landlord. The real estate attorneys at Freundlich and Littman, LLC., can help you ensure your lease is the best fit for your business, that you have the option to break your lease should it be necessary or if a dispute arises.

Call us today at 215-545-8500 or email us at info@freundlichandlittman.com to schedule a free consultation.

What is a Personal Guaranty

A personal guaranty, is a document that a landlord will try to make an Owner or officer of the business sign which puts the individual personally on the hook if the business is not able to either cover the rent or if there is damage or another breach of the lease agreement. It is important when considering your rights to determine whether you as a business owner are personally responsible for your rent to the landlord.

Key Issues

No matter the commercial lease you decide to sign, include these key terms:

Rent: This may seem silly, but never trust any lease without a specified rent amount. For commercial leases, the rent may fluctuate depending on a number of factors including the season. Make sure that you know how the landlord calculates the rent. Be to know what the rent includes.

Length: Residential leases typically last one full calendar year. Commercial leases can be yearly or monthly. Make sure your lease specifies the length terms.

Fees: Any extra fees should be in writing. If a landlord surprises you with extra fees, you’ll know it is outside the terms of the lease.

Responsibilities: The lease should outline which party is responsible for repairs, snow removal, etc. The specific areas included in the lease. If someone slips in the hallway between two businesses, you’ll want to know who is responsible for it.

This list is not exhaustive. Contact legal advice to learn more.