Commercial Landlords: How to Spring Clean Your Lease Agreements
Category Advice
As a commercial landlord with some experience, you understand the vital importance of a detailed, thorough lease agreement. As the foundation of the relationship between yourself and your tenant, it is critical that all terms agreed to by both parties are outlined clearly in the lease, with no room for misinterpretation.
In the commercial property space, the pressure to compile effective and protective lease documents is even greater, since lease periods are typically longer than one year.
In the spirit of Springtime, now is a good time to go over your commercial lease agreement templates, tidy them up, fill any gaps and cracks, and make sure they are helping you protect the tenant / landlord relationship.
How to Clean Up Your Commercial Lease Agreements
Gather and Peruse All Relevant Documents
Ensure you have up-to-date copies of all documents relevant to your lease agreement, including addendums and amendments. Carefully read through each lease agreement, paying close attention to terms, clauses, and provisions. Identify any outdated or unclear language that may need to be revised.
Update Contact Information
Ensure that all contact information for both the landlord and tenants is accurate and up-to-date. This includes names, addresses, phone numbers, and email addresses.
Review Rent and Payment Terms
Review the rent payment schedules, due dates, and methods of payment. Confirm that the agreed-upon rent amount matches the current market rates.
Evaluate Maintenance and Repair Clauses
Assess the clauses related to maintenance and repairs. Make sure responsibilities for repairs, maintenance, and upkeep of the property are clearly defined and reasonable for both parties.
Verify Lease Duration
Check the lease term and renewal options. If the lease is expiring soon, consider whether you want to renew the lease, renegotiate terms, or terminate the lease altogether.
Update Legal Compliance
Verify that the lease adheres to current legal regulations and requirements. This includes any changes in local, provincial, or national laws that may impact lease agreements.
Evaluate Termination and Default Clauses
Review the conditions under which either party can terminate the lease agreement and the consequences of default. Ensure that these clauses are clear and enforceable.
Add a Holding Over Clause
A Holding Over clause offers you as a landlord some legal protection in the event of a tenant giving notice and canceling their obligation to pay rent, but not vacating the premises as agreed and rather remaining on the property. This claim of financial harm allows landlords to fairly easily prove continued occupation (and therefore breach of contract) under the details of the clause.
Once you've reviewed and updated the lease agreements, be sure to communicate any changes to your tenants. Allow them the opportunity to ask questions or seek clarification on the updates you have made.
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Author: SAProperty.com
