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What is a commercial lease?

If you are a Louisiana entrepreneur starting a new business, you probably want to lease the property where your new company will do business rather than going to the expense of purchasing that property. You may have had experience with residential leases in the past, but if this is your first experience with entering into a commercial lease, there are several things you need to know.

As FindLaw explains, a commercial lease often is a very long, very complex, and very intimidating document. In addition, unlike most residential leases, a number of provisions in a commercial lease can be negotiated between you and your landlord. Other differences exist as well, including the following:

  • A commercial lease normally lasts for several years.
  • A commercial lease has fewer legal protections because state laws presume that people engaged in business are more sophisticated about legal documents.
  • A commercial lease is a unique document, specific to not only the property involved, but also to the needs and specifications of the parties signing it.

Negotiable lease terms

Although each commercial lease is different, most such leases are negotiable when it comes to the length of the lease and the amount of the security deposit, the amount of the monthly rent, and the amount of the rent increase for each year of the lease term after the initial year. Most commercial leases are negotiable with regard to what improvements can be made to the leased premises during the lease term and who will pay for those improvements; i.e., you, your landlord, or both of you based on agreed-to percentages. Finally, most commercial leases contain negotiable provisions regarding signage, usage restrictions, compliance with the Americans with Disabilities Act, and whether or not you have the right to sublet or assign the leased premises during the lease term. This is general information only and is not intended to provide legal advice.

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