Commercial Real Estate & Leasing: Frequently Asked Questions
Preparing to Sign a Commercial Lease? Read this First!
Nicole A. Serell, Associate Attorney at Beattie Padovano, LLC, Shares Answers to Frequently Asked Questions
What are some key aspects of a fair and reasonable commercial lease agreement?
A cornerstone of a fair and reasonable commercial lease agreement is the balance of responsibilities between a landlord and a tenant, such as maintenance and repair obligations. Depending on the type of lease and the property, the industry standards for the maintenance and repair obligations can vary.
Also key is the transparency of certain penalties, such as the disclosure of any late charges or interest rates for overdue rent.
Are there any “red flags” that might signal pitfalls or areas of concern?
We commonly review one-sided leases. Many times, leases used by a landlord or a tenant are tailored only to protect the interests of one party. This may not be apparent to someone who is new to the lease negotiation process, however.
Sometimes the biggest “red flag” is a commercial lease that is too simple or too short. While a lease may cover all major business points, the lease may also be silent on what will happen if problems arise in the future (such as casualty, condemnation, defaults, remedies, etc.).
What should I know about including a request for renovations as part of the lease terms?
Any requests for a tenant improvement allowance should be made upfront. This is typically negotiated during the letter of intent stage. Landlords may be more agreeable to performing renovations if the renovations can also be used by future tenants of the space (such as general retail), rather than renovations which are designed specifically for only one tenant’s use.
What other advice do you generally share with someone who is new to the commercial lease agreement process?
Figure out your top priorities. Each business has a different model and goal, so the top priorities vary from deal to deal. Also, clarify which items may be deal-breakers. It is helpful to identify what these are at the very beginning of the lease negotiation process and to communicate such elements clearly with your attorney. This is especially important when there are multiple people involved in the decision-making process. For example, a new retail business looking to lease commercial space may have multiple owners with different priorities when it comes to negotiating the lease. Some owners may prioritize the economics of the deal while others may focus more heavily on flexibility and having an early option to terminate the lease.
What can I expect from an attorney who is helping me navigate the process of pursuing and finalizing a commercial lease agreement?
The commercial team at Beattie Padovano, LLC provides guidance from the beginning stages of negotiating a letter of intent through the entire lease negotiation process. We also provide advice for any disputes that may arise for an ongoing lease.
Beattie Padovano attorneys can also help with other aspects of the commercial lease agreement process, such as negotiating SNDAs, estoppels, and letters of credit.
Nicole A. Serell joined Beattie Padovano, LLC in 2023 as a commercial real estate attorney, and has represented a variety of landlords and tenants on commercial leasing matters on both a national and regional basis, including retail centers, office buildings, and industrial and warehouse facilities. She also has experience representing finance and insurance companies in connection with originating and servicing commercial mortgage loans, including multi-state, multi-property portfolio loans.
Nicole received her Bachelor of Science from Cornell University in 2012 and Juris Doctorate from the University of Connecticut School of Law in 2015. While in law school, she served as Technology Editor of the Connecticut Insurance Law Journal and as President of the Corporate and Securities Law Society. She is admitted to practice in the State of New Jersey and the State of Connecticut, and is a member of the American Bar Association, New Jersey State Bar Association, Connecticut State Bar Association and Bergen County Bar Association.
To learn more about Nicole A. Serell, Associate Attorney at Beattie Padovano, LLC, visit Nicole A. Serell – Beattie Padovano, LLC
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