Real Estate Law 102: Commercial Leases

In order to operate a store or business we must first have a location. Walking through any shopping center we see dozens of stores that are renting this location. Sometimes we see them come and go, replacing one another. The commercial leasing market is a massive market, and each lease is something in and of itself. We will see exactly what distinguishes a commercial lease from other types of leases.

Unique attributes

To settle on a commercial lease is generally a longer and more complicated process. The needs of the renter often greatly differ in the business world. The space allocated for renting can be altered and reconstructed based what the business is. In shopping malls, we have often seen a clothing store shut down and a smoothie shop open up. These needs must be identified and agreed upon from the start. Because of these changes a greater amount of money is usually invested then a residential lease and there for they tend to be more binding, it is not easy to back out of an existing lease. Furthermore because of the nature of the business there is not a set standard for the lease, each one can vary greatly from the next. From a legal standpoint, there are fewer protections for the renter, a good example of this is there is not an accepted deposit amount, and there is no cap, so the owner can ask various percentages.

What to look for

The most important factor to consider is that you can in fact afford the lease. Business have their ups and down and you don’t want a space to large that goes empty or a space that you quickly outgrow. Because it is difficult to leave the lease you will likely be in the location for the previously agreed amount of time. Second, make sure that you can make the necessary alterations that fit your needs. Clear up in advance if you can make changes to the walls, floors, or colors if necessary. Another vital factor is what are your advertisement rights, can you put things in the windows? Can you set up a table or stand outside the door? These can be critical for certain businesses. Competition can be a great thing in the business world, or it can also break the business. Are there restrictions on the adjacent space? Can your landlord or other rent the space next to you to the same exact business you have opened. Will they open a pet shop right next to your ice cream stand? These questions must be addressed in negotiations and agreed upon before the lease in binding. Discuss all these questions with an attorney prior to embarking on any lease.


Commercial leases follow an entirely different set of rules then residential leases. For this reason anyone in the leasing market should look into hiring a commercial lease attorney near you is the smartest thing you can do They must be carefully thought out and evaluated at every step. When the commercial lease is a good fit, then your business can start off on solid ground with one less thing to worry about.