A lease is an agreement between two entities for the use of property. This could real property, such as a personal residence, or chattels and equipment to be used personally or in a business. Real property may of course include a commercial lease for office or workspace.
Commercial leases are on the complex end of lease agreements, as there are various items which need to be negotiated between the lessor and the lessee. Just to name a few, bargaining items may include whether the tenancy is for a fixed term or subject to periodic renewal, whether leasehold improvements are owned by the lessor or lessee, and the type of business which may be conducted on the property.
Commercial leases are on the complex end of lease agreements, as there are various items which need to be negotiated between the lessor and the lessee. Just to name a few, bargaining items may include whether the tenancy is for a fixed term or subject to periodic renewal, whether leasehold improvements are owned by the lessor or lessee, and the type of business which may be conducted on the property.
There are ample opportunities to become creative with your lawyer to protect your rights and create obligations in a lease agreement that make sense given your or your business’s circumstances. It is integral to work with an experienced advisor who understands your objectives and your business, and one who is well situated to draft and bargain for the optimal agreement.
It is also advisable to prepare formal agreements between non-arm’s length parties or companies. For example, solidifying the rights and obligations between parties can be invaluable for explaining income and deductions in the event of an audit. It is also proper business practice.
