Commercial Leases: What to Know?

Answer 1

Signing onto a commercial lease is a huge step for any business. After signing a commercial lease, a business is locked into that space for anywhere from 1 year to whatever year the contract terminates. It is very important to understand thoroughly what a lease agreement requires from both parties involved. It is also important for a business to consider if this is truly the right option for the business. A business should be financially prepared to make the big step into signing a commercial lease before putting any pen to the paper. This article will discuss what a business should know every step of the way within the commercial lease process.

Commercial leases are very different from residential leases. This is the number one mistake many businesses make in proceeding throughout this whole ordeal. Many businesses blindly assume that a commercial lease operates in the same way as a residential lease. This is definitely not true. Business commercial leases are very different from residential leases, because they involve fewer laws that protect the business. There are only very few consumer protection laws that apply to businesses within a commercial lease agreement. Businesses need to protect themselves before signing any sort of commercial lease contract.

Many businesses do not realize that there are no caps on how much an owner may collect for a security deposit. This is one of the most dangerous parts of signing a commercial lease. All too often, many deals end up with an owner stealing a large amount of money from a business in the form of a security deposit. An owner may make a business pay thousands of dollars for a security deposit which the business never ends up seeing again. A business’s entire savings may be destroyed because of one shady deal with an illegitimate property owner. There are also very few laws protecting a tenant’s privacy within a commercial lease. Basically, a business has no privacy rights in a commercial space.

It is important to completely understand how a commercial lease differs from a residential lease before signing anything. All too often, businesses go through the process blindly and have to pay a hefty price in the end.

Answer 2

Commercial lease abstraction is a fundamental and a critical part of the real estate industry.

Let’s take a look at Top 3 most arduous challenges.

1. Lease volume and complexity
2. The new lease accounting standards
3. Lease in foreign languages

Because of lack of specialized skill most companies end up with poorly done abstraction rife with errors and misinterpretation that often result in severe consequences. It is huge undertaking and requires professional expertise.

Springbord has been a partner of choice in offering lease abstraction services. We can help you address these challenges and meet every other lease data management requirement within your budget and timelines