Three Often Overlooked Items in Commercial Leases
Parking is an important part of any commercial space, but when signing a commercial lease, this provision is often neglected. This seemingly obvious and vital component of a business’s space needs is commonly overlooked, and can be costly to remedy after the lease is executed. Parking, along with permitted uses and common area expenses, are some of the most frequently ignored lease matters when a new business is eager to secure an appealing space.
Many leases may either not provide adequate parking for employers and customers, or be silent on the issue of parking. Spending time now to consider your business’s present and future parking demands will benefit both you and the landlord, and avoid difficult future disputes over parking matters.
Sometimes, a business may want parking provisions excluded from the lease. If you’re a retail business owner, some situations may counsel purposeful avoidance of any parking discussion in your lease. For example, if you believe that your customer’s utilization of the parking area will occupy a greater portion than other tenants of similar size, or if you believe the landlord has greater leverage than you in negotiating the lease terms, it is likely that the landlord will be able to place greater restrictions than you would want on your parking apportionment.
If you suspect relatively equal bargaining leverage, or leverage that tips in your favor, the added certainty that a parking provision provides may be preferable to avoiding the topic within the lease agreement, especially if your business has specific parking needs that, if left unmet, would threaten the viability of your business. If your patrons would require lengthy parking times, such as at a large entertainment venue or restaurant, including a parking clause would be highly advisable. You may also want to address parking allowances within the lease if the main area around your business is already congested.
Permitted uses are another important matter to consider before signing a lease. These may be best addressed by having a candid conversation with the landlord about what specific activities your business will undertake on the premises, and then including those in the lease as permitted activities. An experienced attorney can help you identify any ancillary activities to include as well, to ensure that your ability to engage in the primary activities is not undermined, by for example, being allowed to process batch chemicals but being prohibited from receiving supply deliveries via large tractor-trailers.
Finally, many commercial leases will contain provisions related to upkeep of common areas. Those provisions may create various obligations for the tenant, including payment of periodic fees for maintenance of the areas or a requirement that the tenant cause the common areas to maintain certain safety and appearance standards. In either case, it is important to have a thorough understanding of your obligations prior to signing the lease, because common area upkeep can potentially add substantial additional costs that need to be considered in the total cost of leasing.