5 Key Clauses to Watch for in Your Commercial Lease
Signing a commercial lease is a big step for any business in Marshfield, MA. Whether you’re moving into a new office, retail space, or industrial property, the terms of your lease can impact your business’s finances and operations for years to come. To avoid potential headaches down the road, it’s essential to understand the key clauses in your lease. In this article, we’ll break down five of the most important sections to pay attention to, especially when dealing with terms like net lease, triple-net lease, and CAM charges. Consulting a commercial real estate attorney in Marshfield can also provide valuable guidance in navigating complex terms and protecting your interests.
In this article, we’ll break down five of the most important sections to pay attention to, especially when dealing with terms like net lease, triple-net lease, and CAM charges. By the end, you’ll have a better grasp of the fine print and be better prepared for your commercial lease negotiations.
- Rent Structure: Understanding Net and Triple-Net Leases
One of the most important things to clarify is the rent structure of your lease. You’ll likely encounter terms like net lease, net-net lease, or triple-net lease. These refer to how much responsibility you, as the tenant, have for additional costs like property taxes, insurance, and maintenance.
- In a net lease, you’re responsible for paying real estate taxes on top of your base rent.
- A net-net lease requires you to cover both real estate taxes and insurance premiums.
- Finally, in a triple-net lease, you are also responsible for maintenance costs, including repairs. This can be beneficial if the base rent is low, but it’s important to fully understand what these additional costs will look like over the term of your lease.
- Lease Term: How Long Are You Committed?
The term of the lease is another critical factor. Commercial leases can range from short-term agreements of one to two years to long-term ground leases lasting decades. Longer terms might come with lower rent but limit your flexibility if your business needs change. It’s also important to check whether your lease includes renewal options. You don’t want to be forced to relocate after investing time and resources into your space just because your lease is up.
- Use of the Premises: What’s Allowed?
Leases often include specific clauses about the use of the premises. This means the lease will outline what kind of activities are allowed on the property. If you’re leasing space in a multi-tenant building, your use may be restricted based on the needs of other tenants. Be sure that your lease clearly defines what you’re allowed to do in the space. If your business needs change, you may need to negotiate for more flexibility upfront.
- Condition of the Premises: Who’s Responsible for Repairs?
It’s important to understand the lease’s terms about the condition of the premises. Some commercial leases require the tenant to accept the space “as is,” meaning you take responsibility for any repairs or improvements. Others might obligate the landlord to make certain repairs before you move in. Clarify who is responsible for things like HVAC maintenance, structural repairs, or damage caused by natural disasters. If your lease is a triple-net lease, these costs could fall on you, so it’s essential to know what you’re agreeing to.
- Transfer of Interests: Can You Sublease?
If you need to relocate or downsize, you may want the option to sublease the space or transfer the lease to another tenant. Commercial leases often include assignment and subletting clauses that outline whether and under what conditions you can transfer your interest in the property. Similarly, landlords sometimes reserve the right to transfer their interest in the lease or sell the property. Make sure you fully understand these provisions to avoid getting stuck in a lease that no longer suits your business.
Why Paying Attention to Lease Clauses is Essential
Understanding these five key clauses—rent structure, lease term, use of the premises, condition of the premises, and transfer of interests—is essential to making sure your commercial lease works for your business. These terms can significantly impact your financial responsibilities and your ability to use the space effectively. Each lease is unique, so it’s essential to review these terms carefully and consider professional guidance, especially from experts in Marshfield real estate law.
Consult a Commercial Real Estate Attorney for Guidance
Whether you’re negotiating a new lease or renewing an existing one, having a Marshfield real estate attorney for your commercial real estate transactions in Marshfield on your side can make all the difference.
Need help with your commercial lease? Contact our Marshfield commercial real estate attorney today to ensure your lease aligns with your business goals—protect your investment with confidence!
