In Florida, tenants must be careful and seek expert guidance to protect their interests and rights under a commercial lease agreement. Keep reading to find out the essential topics you should look at when negotiating a Florida commercial lease.
What Should I Look for When Negotiating a Commercial Lease in Florida? – The Essentials
It is impossible to draft a proper lease agreement without defining the clauses associated with the property’s rent. When negotiating a commercial lease, prospective tenants may pay attention to several factors, such as:
- When does the rent commence?
- What is the base rent?
- Will the agreement include a percentage rent?
- Will there be a gradual increase in the rent over the lease term?
- What are the terms of the rent? (e.g., monthly, semesterly, yearly)
- Each party’s rental rights and obligations
- Is there a fee for late payments?
- Is there a period of grace?
Common Area Maintenance (CAM) Charges
The term “Common Area Maintenance Charges” refers to specific fees paid by tenants to landlords to help cover costs associated with operating expenses for common areas in commercial buildings.
In most cases, landlords apportion the costs to each tenant based on square footage. During the negotiation, work with an expert attorney to understand the charges and exclusions from items included in CAM charges.
If you do not agree with the terms, it is possible to work with a legal advisor to communicate with the landlord and identify a feasible solution.
In a lease contract, a personal guarantee is a clause containing a promise made by someone to accept responsibility for the tenant if they fail to pay the rent. In the negotiation, it is fundamental to identify:
- Whether a personal guarantee is required
- Whether it may be limited in time or amount required
- Whether the landlord would accept to waive this requirement for a greater amount of security deposit
Terms of the Tenancy
One of the key elements in a commercial lease negotiation is to determine the terms of tenancy. When communicating with the landlord, make sure to define:
- Whether the rent will be periodic or fixed term
- Whether the tenancy commences immediately upon the lease’s signature or only when the tenant opens for business
- Is there a renewal clause?
- Is there an option for an additional term?
- What must the tenant do to exercise this option?
Negotiating a Commercial Lease in Florida – Attention to Detail
The negotiation process is crucial to communicate with landlords and ask for necessary contractual changes (if necessary). In this scenario, work with an experienced legal advisor to identify and negotiate:
- Is the tenant allowed to assign or sublet the premises?
- What are the terms for assignment or subletting?
- Is it possible to obtain the exclusive right to use the premises?
- Will the new tenant’s rights conflict with another tenant’s exclusive use rights?
- Is the landlord allowed to relocate the tenant to a different space within the same building? (if applicable)
- Is the landlord responsible for relocation expenses?
- Is it possible to cancel the lease?
- What are the requirements to revoke or cancel the lease agreement earlier?
- What are the procedures in case of default?
- What are the landlord’s rights in the occurrence of a default?
- Are there default remedies? How will the tenant be affected?