One of the most important documents that a business will execute is a lease agreement. For some types of businesses, such as stores and restaurants, the location and layout of the physical space is critical to the success of the business. At The Law Offices of Daniel A. Singer PLLC, we review, draft, and negotiate lease agreements for all types of businesses. We can also advise with respect to the terms of your current or prospective lease.
While no one lease is the same, the following are some examples of issues that business owners should be aware of prior to executing a commercial lease, though it is by no means an exhaustive list:
Can I conduct my business in this space?
Probably one of the first things to be considered prior to executing a commercial lease is whether you can lawfully conduct your business in such space. In New York, the type of activity which can be conducted in a particular unit is determined by the building’s certificate of occupancy as well as other applicable rules and regulations. Clearly, you do not want to execute a lease to a space where you are prohibited from performing activity which is pertinent to the operation of your business.
Can I perform alterations in the space and, if so, who will pay for such alterations?
Unfortunately, you will rarely find a space that is 100% suited for your purposes. Generally, you will want to perform at least some work prior to moving into the space. You want to make sure, however, that your ability to perform such alterations is included in your lease agreement. If not, the landlord may prevent you from conducting the desired construction. Depending on the length of the lease and the nature of the agreement, it may even be possible to negotiate having the landlord pay for such work.
How long a lease should I have?
Another important factor is the length of the lease. You want to make sure that the lease is long enough so that you can have the opportunity to build your business at that location but not so long that it creates a burdensome financial commitment.
What happens if I want to leave the space before the expiration of the lease term?
Life is unpredictable. Circumstances may arise where you may want to terminate your lease early. Your ability to terminate the lease prematurely will depend on whether there is a clause in the lease which allows you to do so, often referred to as an early termination clause. In many instances, a landlord will require a personal guaranty of some or all of the lease terms, commonly referred to as a “good guy guaranty”, with such guaranty expiring when you leave the space provided that certain conditions are fulfilled.
Will I need to pay anything beyond the base monthly rent?
Many commercial leases require payment beyond the mere monthly rent. In New York, for example, it is common for tenants to be required to pay a portion of the building’s real estate taxes. It is also common for tenants to be responsible for their portion of the utilities. In some instances, such utilities are billed by the landlord whereas in others tenants are billed by a separate meter. It is critical that you understand the rental payments that you will be responsible for prior to executing the lease.
Please contact us if you would like to address your commercial lease agreement.Residential Leases
In New York, residential leases are regulated by a vast array of laws. Some leases, for example, are subject to “rent stabilization” which dictates the amount by which a landlord can raise a tenant’s rent as well as the circumstances under which a landlord can refuse to offer a lease renewal. Apartments located in co-operative apartment buildings or condominium buildings may be subject to the rules and regulations of the respective co-operative and/or condominium board. Moreover, an apartment located in a private home may be subject to different rules than a unit located in a large apartment building. At The Law Offices of Daniel A. Singer PLLC, we review, draft, and negotiate residential lease agreements. We can also advise you with respect to your current or prospective lease agreement.
Please contact us should you wish to discuss your residential lease agreement.