Every landlord should consider creating a lease for their property, regardless of whether they are leasing to family or strangers. The terms of a lease determine how long a tenant can live in a property, what they can do to the property and what happens when the terms are violated.
There are a few considerations to make when creating a commercial lease. Here are some terms to consider:
1. Lease length and renewal
The very first thing that landlords should consider is how long a tenant will live in their property. Does a tenant pay month to month, or does a lease last for a year? What happens once the lease is over? Tenants may be given the option to renew their lease once it ends.
2. Payments and cost increases
How much is a tenant expected to pay each month? A tenant may be expected to pay more after renewing their lease every year. Some landlords require tenants to pay extra costs for pets. Tenants may also need to pay fees if they are late with their payments.
3. Subletting clause
Many commercial leases make it clear that tenants cannot sublet the property. Subletting can lead to serious legal issues. Defining this term in a lease can help prevent subletting and clarify the consequences of subletting.
4. Property damage
What would happen if a tenant caused damage to a property? A lease may clarify that it may be terminated if a tenant causes property damage and that a security deposit will be used for repairs.
5. Early termination
A lease often includes an early termination clause. This allows the landlord to terminate the lease if the tenant violates a term, such as subletting or causing property damage.
A commercial lease should have very clear language. If the language in a lease is confusing or unclear, it can lead to legal issues. Legal guidance can help.
