Top Lease Clauses that Commercial Tenants Must Negotiate.
There are a number of important clauses that commercial tenants should consider negotiating when entering into a lease agreement. Some of the top lease clauses that commercial tenants should focus on include:
1. Rent: Tenants should negotiate the amount of rent they will be paying and how it will be increased over time, if at all.
2. Term: The length of the lease should be agreed upon by both parties, as it can have a big impact on the tenant's ability to plan for the long term.
3. Renewal options: Tenants should consider negotiating for options to renew the lease at the end of the initial term in order to secure a longer term commitment.
4. Use Clause: Tenant must negotiate about the allowed use of the space, and any restrictions or prohibitions on the use of the space during the lease term.
5. Improvements and Alterations: Tenants should negotiate the ability to make improvements or alterations to the space, and who will be responsible for paying for them.
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6. Operating Expenses: Tenants should negotiate who will be responsible for paying for operating expenses, such as utilities, property taxes, and common area maintenance (CAM) fees.
7. Indemnification and Insurance: Tenants should consider negotiating for provisions that protect them from liability in case of accidents or damage to the property.
8. Termination and Eviction clause: Tenants should be familiar with the terms and conditions of early termination of the lease and eviction terms.
9. Assignment and subletting: Tenants should negotiate whether they are able to assign or sublet the space to another tenant during the lease term.
10. Binding effect on future parties: The tenant should be aware of any clause that will have a binding effect on future parties like successors and assigns, related to the lease.
It's important to note that, different jurisdiction and different types of lease agreement may have different clauses, it's always best to consult a lawyer to review your lease agreement and negotiate the terms with landlord.