The Biggest Red Flags in Commercial Lease Agreements

The Biggest Red Flags in Commercial Lease Agreements

The relationship between a landlord and a business doesn’t always turn out to be a smooth one. Ideally it would be great if there were wasn’t any communication in lease agreements or in expectations from the two respective parties. But not everything turns out the way we want. From small businesses having issues with landlords to the feeling of being taken advantage of, there are a number of red flags that can pop up before or during a commercial lease.

These situations can get complicated and drawn out, not to mention expensive. It’s important in times like these to have local coverage in line, such as Orlando commercial rental property insurance. But before you have to go to your insurance for protection against lease issues, you should be aware of some of the things tenants can be cautious of from the start.

Unfavorable Relocation Clause

The Balance suggests that tenants should be on the lookout for clauses that favor the landlord heavily. A relocation clause puts the ball in the landlord’s court, as they are given the right to transfer a business to a different space to accommodate larger businesses. This kind of clause is a staple in lease agreements, but tenants do have the option to request certain contingencies like the right to maintain the same rent and same structure quality as the previous space. Also, be sure to request at least one month’s notice of relocation.

Relying on Trust Alone

Time was a handshake was all it took to create and sustain a solid working relationship between landlord and commercial tenant. Those days are virtually over. Trust s huge within any agreement, but there still needs to be a written and signed lease that both parties can’t stray from. Never rely on verbal agreements for a lease and transcribe everything that is said in lease term meetings.

Vague Renewal Clauses

Another clause to look out for is one with a vague outline. Options for renewal should be made clear and stated as a whole, not in part. Renewal options should mention how much time a tenant needs for lease renewal as well as a potential for increase in rental rate.

A Lease with Vague Fees

There have been times when seemingly random fees pop up, leaving the tenant wondering just what they’re there for. There are landlords who might try to charge fees that are not stated clearly in a lease. If this happens you have the right to contest just what they are meant for.


About Newman Crane & Associates Insurance

Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Since 1965, Newman Crane & Associates Insurance has been helping Central Floridians make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (407) 859-3691 for a consultation.