Lawyers
Here's what you should include in commercial leases:
Do you own a commercial property and want to rent it out?
Protecting your money and property is of the utmost importance, so ensure that your commercial lease agreement is comprehensive and exhaustive. Ensure that the agreement covers all the relevant aspects of the transaction and provides you with adequate legal protection. Here’s what you should include in commercial leases: This topic will be elaborated in the following article.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
The purpose of the lease
The lease agreement should specify, first and foremost, what the purpose of the lease is, namely, the type of business that the tenant intends to conduct on the property. This must be in accordance with the purpose of the property, otherwise the landlord may find himself in a legal bind. In addition, it is essential that the contract clearly specifies that the leased property will only be used for the type of business specified. It follows that the lessee would not be permitted to change the purpose of the business carried out in the leased property, except with the written approval of the lessor.
The rental period and the extension of the rental period
It is clear that the lease period must be defined in an agreement of this nature. Furthermore, when drafting the lease agreement, it is important to take into account the extension of the lease and the mechanism to do so. While at the same time, it is worthwhile to include the option to terminate the agreement early by giving prior notice. As a result, the landlord will have the flexibility to renovate and/or sell the property if he so desires. The possibility of terminating the lease ahead of time may also be in the tenant’s best interest, as he is often uncertain about the scope of his expected business activities.
Adapting the property to the business needs
It is common for the tenant to wish to make changes to the leased property to make it more suitable for his business needs. Therefore, the agreement must specify whether and how this may be accomplished. Are the tenant’s costs to be borne solely by them? Is he required to restore the property to its original condition? If the landlord benefits from the proposed changes and wishes to leave them, he may agree to share some of the costs by participating in the project or by providing a discount on the rent for a certain period of time.
Guarantee from the bank
It is very important for the landlord to demand a bank guarantee (or cash guarantee) from the tenant in order to ensure that the tenant will fulfill his/her obligations (such as paying rent and property bills). In this regard, it should be noted that, according to the amendment to the Rent Law (for residential property), the landlord is limited in his ability to demand a guarantee of three months’ rent from the tenant. In order to utilize the guarantee, prior notice must be given to the tenant, which will enable him to meet his obligations, and the guarantee will only be used up to the amount of the tenant’s debt.
Support From a Lawyer is Essential
When it comes to a property lease agreement, there is a tendency to think that there is no need for an attorney to assist in drafting the document. Many times, property owners use a document that they themselves draft or otherwise download a generic document from the Internet. This is usually done to avoid paying attorney’s fees, due to the lessor’s conviction that they do not need one. In reality, however, without a well-drafted, comprehensive lease tailored to the specific circumstances of the case, a metaphorical “gap” remains that will allow disputes between the parties to arise. There is also a possibility that this “gap” may result in a breach of contract on the part of the tenant. It is especially true for apartment lease agreements as well as commercial lease agreements, which are more complex and, in general, longer-term. As a result, it is highly recommended that the lease agreement be drafted by a real estate attorney / Commercial law attorney. Investing in this service will pay off for the landlord in the long run, as he will save both time and money.
