It is impossible to talk about establishing a business without dealing with a commercial estate lease agreement. Generally, this type of contract is much more complex than a residential lease agreement, which requires attention to detail and caution during negotiations.

This article will discover the fundamentals you need to know before entering into a commercial real estate lease agreement in Florida.

Commercial Real Estate Lease Agreement – What Is It?  

In layman’s terms, a commercial lease agreement is a contract by which a business rents an office or other business property from a landlord. In this context, the term “commercial” refers to the fact that the lease is for business activities rather than residential purposes. 

A commercial lease agreement represents the essential paperwork for entering a rental agreement with a commercial entity on the landlord’s property. Generally, commercial entities do not get the same consumer protection that an individual resident has while participating in a rental agreement. 

In Florida, state lawmakers assume that both parts of the agreement (landlord and business owner) are more knowledgeable. Thus, tenants have less consumer protection against deceitful practices from a landlord in these particular cases. 

Commercial lease agreements have more varied terms when compared to residential leases, mainly as landlords typically utilize standard forms for agreements involving residential tenants.

Commercial Real Estate Lease Agreement – Explaining the Terminology 

After signing a commercial lease agreement, both landlord and tenant have to follow several implied and express duties within the contract, including the formalities associated with the document’s execution.

Within a commercial lease, a landlord (lessor) grants the lease of a real estate property to another party, the tenant (lessee). In exchange, the lessee will pay the landlord for the right to use the property for a pre-defined period.

In this sense, it is not uncanny to see corporate entities acting as a lessor or lessee in a business relationship, especially for companies specialized in rental property. 

As provided by state law (Florida Statutes §692.01), “any corporation may execute instruments conveying, mortgaging, or affecting any interest in lands by instruments sealed with the common or corporate seal and signed in its name by its president or any vice president or chief executive officer.”

Commercial Real Estate Lease Agreement – Terms and Clauses 

Even though the terms and provisions in a commercial lease agreement may vary greatly, there are specific terms that no leasing contract can lack. 

Firstly, it is crucial to enter the names of each party involved in the lease, a description of the subject property (real estate), the lease term, the amount of rent payment, and the security deposit term. 

Any commercial lease agreement in Florida should include a detailed description of the property under a lease, including information such as common areas, a parking facility, etc. 

In most cases, lessors prefer long-term lease agreements. However, it is possible to negotiate for a short-term lease with an option to renew. Still, it may incur a significant increase in the rent amount. 

It is also crucial to be aware of the footage used by the landlord to calculate the property’s rent. During negotiations, it is essential to work with an expert attorney to double-check all details and ensure no harm to the lessee.

For instance, many landlords include the footage of elevators and interior walls while calculating a property’s rent price. It is also possible to calculate and negotiate which party is responsible for other costs such as property taxes, insurance, and repairs.

Usually, commercial lease agreements provide for an annual percentage-based rent increase. This increase means potential lessees need to be aware to avoid unbearable rental costs in the future. Other terms may include tenant use restrictions, rent modifications, assigning and subletting clauses, insurance requirements, and mediation/arbitration clauses.

Once both parties have all terms in place within the lease contract, they can enter their signature to make it legally binding.  As provided by Florida law (Florida Statutes §689.01), a commercial lease agreement with a length superior to one year must be signed in the presence of two subscribing witnesses. 

Commercial Real Estate Lease Agreement in Florida – We Can Help You 

Entering a commercial real estate lease agreement without knowing what terms and clauses you agree with is a huge mistake. Attorney Romy B. Jurado Esq. is an expert attorney that will provide all the necessary guidance you need. 

Waste no time with uncertainty. Get in touch with us today by calling (305) 921-0440 or emailing Romy@jflawfirm.com to schedule a consultation.

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