You are about to sign a lease agreement for property. Whether it is residential or commercial property, you should look for certain key provisions and be sure you understand them.
Term of the lease.
The word “term” simply means how long the lease will be in effect. You want to know how long you have to keep leasing this property when you sign a lease.
Generally speaking, commercial leases have a longer term than do residential leases. This is because both sides to a commercial lease make business decisions for the future.
People who sign residential leases, however, generally want to have more flexibility to move if their circumstances change.
You should give a lot of thought to what could change before you sign a long-term lease.
The lease needs to clearly describe the property in question when you sign a lease. When you lease an apartment, a simple reference to the apartment number will be sufficient.
If you lease commercial space, it is advisable to attach a diagram of the space to the lease to avoid any misunderstanding.
When you lease property including land, attach a detailed legal description or plat (another word for map).
Rents and charges.
The lease should set forth in plain language the amount of rent due each month when you sign a lease. But, you should be on the lookout for other charges.
Some landlords will also charge for utilities, common area maintenance, taxes and insurance. You need to be certain you understand the total cost to you of renting the property.
Most landlords will not take responsibility for the destruction or theft of your personal property that you maintain on the premises. You should purchase renters insurance to cover your property. This type of insurance is fairly inexpensive.
Use of the property.
Most commercial leases contain a provision that places limits on what a tenant can do with the property. Before leasing property to operate a business, read the lease to be sure it permits your planned use of the property.
Residential leases can also contain restrictions on the use of the property, visitors, and similar matters. You should pay attention to this provision before signing the lease.
The law imposes certain obligations on the landlord to maintain the property. The landlord can, however, transfer some of these obligations to the tenant in a written lease.
You determine whether, and to what extent, you have to maintain the property.
Renewal rights when you sign a lease.
If possible, you will want to include a provision that gives you the right to renew the lease after its initial term expires. Such a provision gives you flexibility to remain. At the same time, it does not commit you to remaining.
If the lease is not renewed, then it automatically terminates at the end of the initial term. You want to understand your obligations when that day comes.
Most leases will also give the landlord the right to terminate the lease early for different reasons. Read the lease carefully to understand when and how the landlord can terminate the lease before the end of the term.
Before you sign a lease, you want to understand these essential terms. Contact one of our Contract Lawyers if you are uncertain as to the meaning of the lease provisions.
Pepper & Odom Law Firm
Ridgeland, MS 39157
Original Content by: Attorney Craig Panter of The Panter Law Firm