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By John R. Merlino Jr. Esq.
Founding Attorney

Finding a desirable location is just the first step in starting or relocating your business. If a commercial landlord owns that property, you will need to sign a commercial lease agreement in order to use it. These agreements are common contracts, but the terms your agreement contains can play a role in the overall success of your business.

A commercial lease agreement is a contract. As with any other contract, business owners in New York and New Jersey will be bound by the terms of these agreements. While every lease agreement differs, most will cover the same general topics.

Rent Amount and Structure

At a minimum, the lease agreement should specify the rent you are expected to pay for the property you are leasing. The agreement should also spell out what extra expenses your rent payment covers, if any. Be wary of any proposed agreement that tries to hide what your true monthly cost is. 

If you are signing a multi-year lease, review the agreement carefully to see if your rent will increase each year and if so, by how much. Having this information spelled out in the agreement can help you better plan for future years and determine whether the lease agreement is reasonable for you and your business plans.

Short-Term vs. Long-Term Leases

Short- and long-term commercial leaves are commonly available, depending on the landlord and your needs. Each offers advantages and disadvantages that you should consider. 

A longer-term lease can provide your business stability and predictability while establishing yourself. However, if you need to move locations or your business is unsuccessful, you may still be responsible for years of unused rent.

In the same way, a short-term lease can provide you with the flexibility to move or close up your business if things do not work out. However, their short duration may not suit your needs if you are looking for a stable location and predictable rent payments. You may also be responsible for holdover rent if you overstay your lease without renewing it.

Zoning Considerations

You and the landlord will likely have discussed the nature of your business and the purpose for which you will use the commercial space. No matter the assurances given to you by the landlord that the property is properly zoned for your business activity, you will want to conduct independent research and verify this yourself. 

Violating zoning laws in New Jersey or New York can result in the imposition of a fine. Such fines can continue to accumulate if you do not shutter your business and vacate the premises, which can be costly.

The Allowance of Improvements

You may need to upgrade the leased space in order to make it suitable for your purposes. If so, you should have the lease agreement specify what improvements are to be made and who bears the responsibility for making them. Having such terms in your lease agreement can help you avoid later miscommunication.

As with zoning laws, ensure your anticipated improvements are permitted by local New Jersey or New York ordinances and that they are properly completed. Otherwise, local authorities could require that the improvements you did complete be removed, replaced, or repaired at your expense.

Turn to a Staten Island Real Estate Lawyer from Merlino & Gonzalez Today

Lease agreements in New York and New Jersey can be complex, especially for business owners. This is why having an experienced real estate lawyer review any commercial lease agreement before signing is vital. 

At Merlino & Gonzalez, we can discuss your business goals with you and advise you on whether a commercial lease agreement helps or hinders those goals. Our Staten Island real estate team can also assist in negotiating more favorable terms for you. Reach out to us to schedule your consultation.

About the Author
John is a fierce advocate and the office guru for problem-solving and brainstorming. He guides clients through every stage of a real estate transaction from offer to contract, navigating through nerve-shattering home inspection and title clearance concerns, maintaining constant contact with lenders, conducting the actual closing, and continuing to advise clients with regard to any post-closing concerns.  John brings a practical and fair-minded approach to the process which has earned him the respect of his clients and peers.