Although this blog has discussed purchase transactions involving commercial real estate in pervious posts, it is important to remember that, for a variety of business and other reasons, many Oklahomans choose instead to lease a property for their business’s use. Like the terms of purchase agreements, the provisions of a lease are important both to a commercial tenant and to the landowner, and they can mean the difference between and good and bad financial outcome for either party.
It is for this reason that careful contract negotiation is required when an Oklahoma business chooses to enter a commercial lease agreement. Unlike residential leases, negotiation is the norm when it comes to nailing down the terms of a commercial lease, so prospective tenants should feel no obligation to sign the first agreement a landlord provides to them.
Among the key terms in a commercial lease, how much rent will be paid and by when is one of the most important. Since commercial leases tend to last longer than residential leases, it also may be important to determine whether and under what circumstances a landlord can increase the rent during the term of the lease.
Another important term to discuss is exactly what space the tenant is renting and how people, including business associates and customers, will be able to access the tenant’s space. This can be important for making sure the tenant is actually renting a building it can use effectively. Speaking of which, the lease should also describe in detail what a tenant may or may not do to the property and how exactly the tenant will be using it.
On the flip side, particularly in situations involving retail shopping centers, a lease should also specify whether the tenant will be the only one permitted to engage in his or her type of business on the landlord’s property.
There are many other terms that a tenant and landlord will want to negotiate before entering in to a commercial lease agreement. It is often advisable to have an experienced commercial real estate attorney assist in these types of negotiations.