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Many California readers of our Los Angeles business and commercial legal blog at Larson & Gaston have likely rented apartments at some point in their lives, or currently have an outstanding residential lease that they are complying with.
There’s really not much to that, is there? Such leases are typically pretty cut-and-dried affairs and don’t feature a lot of open-ended considerations that a would-be tenant must closely focus upon and smartly negotiate for a best-case outcome.
That is certainly not the case with commercial leases, which stand in many respects a proverbial world apart from their residential counterparts. Parties on both sides of a commercial lease transaction — that is, landlords and business principals seeking space, respectively — have a lot to consider, and they need to get things right before affixing signatures to what is a most important contract.
One business article on commercial lease agreements notes that they “are more complicated than residential leases because the terms are negotiable and vary greatly from lease to lease.”
An apartment seeker might simply be seeking to ensure that a dwelling has a second bathroom and is conveniently close to work. A business entrepreneur, conversely, might be closely focused on many critically important matters that need to proactively raised and negotiated, including things like the following:
- Caps on periodic rent increases
- Lease length (e.g., fixed-term or short-term with a renewal option)
- Improvements/modifications to leased spaces
- Zoning considerations
- Protective exclusivity clauses that bar localized competition
- Assigning/subletting prerogatives
All these things — and many other matters — are typically wide open for negotiation between commercially contracting parties.
That makes for some ambiguity and, often, considerable complexity.
Questions or concerns regarding commercial lease negotiation, drafting, enforcement and other related matters can be directed to a proven California business law attorney.