Welcome back to the final part of our trilogy on common commercial lease clauses. If you missed them, here is Part 1 & Part 2.
Parking
Unless you are located in an urban building without parking, your lease should contain language that defines your and your employee's rights to park their cars. Parking lease clauses lay out what parking costs if there is a charge, how many free spaces you can get and what rights you have in a free parking lot space. Pay careful attention to your rights especially if you intend to create a high density space.
Renewals and Holdovers
Hopefully, your tenancy will be so successful that you decide to stay in your space beyond the end of your lease. The clauses that deal with renewals specify what rights, if any, you have to renew, while holdover language lets you know what rights you have to stay in your space after your lease expires without doing a formal renewal.
Rent and Additional Rent (CAM)
The financials of your lease involve more than just your monthly rent. Read your lease carefully to see how and when that rent should be paid, when it will go up, and how those escalations will be calculated. In addition, many buildings require you to pay additional rent for common area maintenance charges. CAMs cover your pro-rata share of the building's operating costs and what specifically goes into them is specified by lease clauses.
Rights of First Refusal / Negotiation
Some leases give you the ability to have some control over other spaces in the building. For instance, you might have a right of first refusal to take over an adjacent space by matching any other offer that a different tenant makes. If you can't get a right of first refusal, your lease might give you the right of first negotiation for leasing other spaces or for purchasing the building. These rights require the landlord to go to you first before putting spaces on the open market.
Rights of Use ("Use")
Use lease clauses define your specific rights within the building and within your space. Usually, these clauses will contain general legal language to formally grant you a tenancy. They may also provide more specific definitions of what you can actually do in your space and what you cannot do. An exclusive use clause, for example, gives you the right to be the only tenant in a building doing something while a restrictive clause prevents you from competing with other tenants or engaging in certain activities.
Signage
Whether you are placing a large lit sign on the side of the building or you just have a sign by your entrance door, your lease contains language that specifies your rights to affix signs outside of your demising space. Typically, the larger your space, the more latitude you will receive, but many buildings have strict standards and may be unwilling to relax them.
Taxes
Lease clauses dealing with taxes serve multiple purposes. Some specify what responsibility you have to pay the building's property taxes. Others serve to sever your business from your landlord's, clarifying who pays what taxes independent of the property's building tax.
Termination and Buyouts
While renewal and holdover lease clauses specify what happens when you want to stay past your lease, termination and buyout clauses deal with how your lease ends. These will let you know in what condition you need to leave your space and how you need to work with your landlord to effectuate a smooth move out. Buyout clauses let you know how you or your landlord can end the lease early, usually by paying a lump sum of money.
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