Tenant's Rights for a Commercial Lease

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As a commercial tenant, you have whatever rights the lease gives you and not much beyond that. State laws assume that as a business owner, you know the law more than a residential renter does and don't need as much legal protection. Guarantees you might take for granted when renting an apartment do not apply if you're leasing a storefront or an office.

Habitability

Even if a residential lease states that the landlord is not responsible for any repairs or problems, most courts will require the landlord provide a livable rental unit. In a commercial tenancy, if the lease says the landlord isn't liable for repairs, then she isn't. Even if the lease requires her to make repairs, it might not say when they have to be made. Nor is the landlord liable for damages if a lack of working air-conditioning, for example, makes it impossible to work in your office.

Breaking the Lease

Commercial leases involve a lot more money than residential leases do, so the law makes it that much harder to break them. If you sign the lease, then discover the zoning isn't compatible with your business, that doesn't entitle you to walk away. If your landlord isn't making repairs, you don't have the "repair and deduct" remedy -- making repairs yourself, then taking the cost out of the rent -- that residential tenants do unless you negotiate it into the lease. Even if your business fails, you may have to continue paying the lease.

Negotiation

Landlords or rental agents may present you with a "standard" lease, but there's no such animal. Negotiating the terms, requesting clauses that meet your needs and objecting to terms you don't like are all part of leasing. Be ready to negotiate exactly how much space you're renting (including common areas of the building), the landlord's responsibility for repairs and what happens if your business fails. If you don't think you have the expertise to handle the lease negotiations, it's worth hiring a real-estate agent to do the job for you.

Misrepresentation

One area where your state's laws may protect you is if the landlord lies. In Tennessee, for example, if you're renting space of 1,500 commercial square feet or less, the landlord must state in writing whether the property complies with local building codes; if the landlord doesn't disclose problems, you can end the lease or sue for damages. A 2008 California case found that a landlord who based the rent on the square footage of the property, misrepresented the size and refused to let the tenant measure it before signing was legally at fault.

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