Business is booming and the set up you currently have in your basement just isn’t going to cut it anymore. And that’s great! You’re on your way towards success. The only problem is that finding and securing a commercial lease is not as easy as you might think.


Even if you have experience in renting for your residential use in the past, commercial leases are an entirely different game. Though every state and province has slightly differing laws on the subject, the premise stays the same- residential tenants are protected, commercial ones are not.


What do we mean exactly?


Despite what it written in each kind of lease, residential tenants are usually supported by some kind of government act that they can fall back on if they cannot uphold their end of the deal. Landlords are limited in reasons for which they can evict, the timing of it, and in most cases, they are the losing end of the deal. However, commercial leases give a more equal power split between the landlord and the tenant, all which can be outlined in a usually quite lengthy commercial lease agreement.


Residential leases are an agreement between the landlord and the renter(s). Usually it’s a monthly term or a yearly lease with a month to month agreement following that. As the tenants pay rent, the landlord is responsible is maintaining the property and keeping the apartment, house or townhome up to standards. However, if the landlord does not provide what was set out in the initial paperwork, the renters have the right to withhold rent and can’t be kicked out of their home. Even if the renters haven’t been paying for whatever reason, the landlord will have a hard time evicting these tenants from the property.


This is because the government wants to protect the right of people to a home- even if they don’t own it.



Commercial leases are all done on an individual case basis depending on the nature of the business and the agreement drafted. The term of lease is usually longer because of the investment of the tenant into remodeling the space and the dependence of its clientele. However, once that lease is up, either parties have the right to exit the relationship after giving notice (the exact time depends either on the original agreement or on the local laws). The lease will outline in detail the nature of the business activities that will take place as well as the effect that it will have on the building. Because they are altering the physical aspect of the building, tenants are usually responsible for much of the utilities and maintenance, unlike that of the residential lease. In commercial lease, the tenants’ rights are equal that of the landlord and not protected as they would be if it were a residential one. That’s why it’s important to hire a real estate attorney to negotiate and review your commercial lease before you go ahead and move it.


The government specifically made looser laws to allow for more flexible negotiations and they were created under the assumption that there would be third party counsel offering guidance on making the most favorable agreement for both parties.


So as you inch out of your basement and into the sun, don’t be blinded by the great storefronts or warehouse opportunities that first arrive. Before you enter into any agreement or sign a lease, be sure to read all the paperwork, seek professional advice, and go into this new stage with confidence.

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