Nobles Law Firm

Standard language in a commercial lease?

commercial-leaseNot long ago, a corporate client of mine asked me to review the terms of a commercial lease that her company was considering signing.

The lease offered a great location that would be perfect for a company that had enjoyed a considerable amount of success. The location was great and the new offices provided under the lease would impress the heck out of clients

There was just one problem – some of the terms of the lease were objectionable to my client. I suggested some changes and told her to give me a call if she needed me to visit with the landlord’s counsel.

After visiting with another attorney, I learned that a lot of people and companies enter into commercial leases without reviewing them at length for at least two reasons. First of all, they really like the space they want to rent. Second, they are often disarmed when it comes to lease terms that seem harsh.

“Oh, that’s just standard language,” the landlord or his agent might say. “We’d never do that.”

The bad thing here, of course, is that a lease is a contract and both tenants and landlords can insist that the terms in that lease are followed to the letter.

Let’s say, for example, that a paragraph in the lease gives the landlord permission to wander onto the property whenever he or she wants for the purpose of inspecting the premises.

“But, wait,” the potential tenant says. “We’ve got trade secrets and client meetings. We’ve got to have some notice before anyone barges into our office. We’ve got an expectation of privacy.”

“Oh, don’t worry about that,” the landlord says. “We’ll let you know in advance when we want to inspect. So, hurry up and sign that lease, huh?”

The problem with that logic is that the tenant can’t complain much if he or she signs that lease with the “landlord can barge in whenever he wants” clause in it. Remember – we’re talking about a contract here and the terms that are written into it will be the ones that a court is likely to enforce.

In other words, commercial tenants are well advised to review their leases fully and sign them only if they are satisfied with the rights and obligations granted to them under those contracts. There’s nothing wrong with negotiating the terms of a lease and I’d argue that landlords expect some negotiation.

The worst thing to do is sign a lease based on the notion that a lot of the language is “just standard” and that it won’t be enforced. Commercial leases typically involve a lot of years and a lot of money, so it makes sense that all parties to one should be satisfied with their rights and obligations under it before signing it.

This column — part of the Practical Lawyer series — was authored by Ethan C. Nobles and originally appeared in the March 14, 2016, edition of the Daily Record in Little Rock.

One thought on “Standard language in a commercial lease?

  1. Kairi Gainsborough

    You gave some really great examples of why everyone should consult an attorney when entering into a commercial lease. I agree that people should pay very close attention to the “standard language,” and not just what the landlord tells you. If you sign a lease with terms that you don’t understand, that could cause you issues down the road. If there are parts that you want to change, you need to do that before you sign anything!

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