Chicago’s commercial rental market is extremely competitive. According to data from the National Association of Realtors (NAR), commercial leasing rates are rising all across the country. If you are considering renting commercial space for your business, it is crucial that you are able to find a unit that is well-suited for your company’s unique needs.
For businesses, assessing a commercial property involves far more than considering the general location of the real estate, the length of the lease, and the amount of the rent. You need a commercial lease agreement that truly protects the rights and interests of your business. Here, our Chicago commercial real estate lawyers highlight five other key provisions that should always be addressed when drafting a commercial lease.
1. Building Maintenance
A commercial lease should clearly outline each party’s responsibilities in regards to performing maintenance. Although certain maintenance issues may seem obvious – such as the landlord’s duty to repair a broken HVAC system – disputes over maintenance can arise if the commercial lease is ambiguous.
2. Build Out Clause (Improvement and Alterations)
In many cases, a property must be improved or altered before a business can actually use it for a commercial purpose. A build out clause spells out the extent to which the landlord will cover any costs for improvement done to the property. Beyond cost concerns, the commercial lease should also clarify how much discretion a commercial tenant has to make improvements or alterations to the property.
3. Exclusivity Clause
In Chicago, many commercial properties are linked to other properties. For example, a commercial landlord may own a building that has several different units available for commercial tenants. Depending on the nature of your business, it may be advisable to negotiate an exclusivity clause with the landlord. You may not want a landlord to allow a competing business to open next door.
4. Sublease & Termination Options
For a number of different reasons, it is not always possible for commercial tenants to guarantee that they will be able to operate their business for the full term of the lease. A well-drafted commercial lease should explain a tenant’s right to sublease the property or to get an early termination of the lease.
5. Renewal Rights
Finally, business owners always need to consider their renewal rights. Once you have built a successful commercial enterprise at a certain location, you need to know if you will have the right to keep operating there going forward – beyond the terms of the lease. Getting a guaranteed renewal clause or a first priority option can be a very valuable right for Chicago businesses.
Get Help from Our Chicago Commercial Real Estate Lawyers Today
At North Suburban Legal Services LLC, our top-rated Chicago real estate attorneys have the skills and experience required to draft, review, negotiate commercial lease agreements. We also handle all aspects of commercial real estate litigation. To learn more about what we can do for you, please contact our law firm today for a fully confidential, no obligation initial consultation.