Commercial Landlord Tenant Issues

If you lease a commercial space for your business or are a commercial landlord with a business property, the terms of the commercial lease you have in place guide these transactions and can have an immense impact on your bottom line. These contracts determine critical elements of commercial leasing, which makes having a well-considered and well-worded lease in your best interest, and an experienced Virginia business attorney can help you with that.

The Relationship between Commercial Landlords and Tenants

In Virginia, commercial leases are essential contracts that guide the relationship between landlords and tenants in real estate transactions. If there is no lease in place or if the lease doesn’t address a specific issue that arises, the state’s default terms apply.  As such, there are several important concerns that every commercial landlord and business tenant should carefully consider.

Lease Terms and Renewal Options

A key element of every commercial lease is duration – or the lease term. Commercial leases tend to have longer terms than the one-year duration that is commonly associated with residential leases. Commercial leases often range from 3 to 10 years – or beyond – and renewal options are also an important consideration. A clear focus on continuity and renewal helps to ensure that challenging relationship issues won’t arise.

The Rent Structure

The rent structure in a commercial lease can be quite complex and may address terms like the following:

• Base rent
• Percentage rent
• Additional expenses that can include property taxes, maintenance costs, utility expenses, and insurance coverage

Clearly defined rent terms are essential to well-established commercial leases.

Use and Occupancy

Your commercial lease should include specifics regarding the permitted use of the property and any restrictions on occupancy. These provisions set the terms for the space’s intended use and may also outline restricted activities or business operations. Flexibility that is intended to support potential business growth, however, can be built in. Any breaches of the terms included can lead to legal consequences.

Maintenance, Repairs, and Improvements

A commercial lease can allocate the division of responsibilities for required maintenance, repairs, and improvements between the commercial landlord and the business tenant. Clearly stating who is responsible for what lessens the potential for disputes to arise and helps to ensure that the commercial property will be well maintained throughout the commercial lease term.

Default and Termination: Rights and Remedies

Commercial leases generally outline the rights and remedies available to both the landlord and the tenant in the event that the other defaults on or terminates the lease agreement. 

Default generally applies to circumstances like the following:

• A breach of lease terms 
• Failure to pay rent
• Insolvency 

Related consequences can include lease termination, eviction, and legal action.

Consult with an Experienced Virginia Business Attorney Today

The accomplished Virginia business attorneys at Culin, Sharp, Autry, & Day recognize the important role that commercial leases hold when it comes to the strength of the landlord/tenant relationship. And because this relationship can play a key role in your financial success, we’re standing by to help. Contact us online or call 703-934-2940 for more information today.