Commercial leasing can be complex, and if you have to deal with a dispute, it can really ruin your day. It’s frustrating to deal with a tenant who isn’t following through on the requirements of a lease or to deal with someone who has violated a clause in the leasing agreement.
There are many common causes of commercial leasing disputes. It’s important that you understand what they are, so that you can protect your business.
What are the most common causes of commercial lease disputes?
The most common causes of commercial lease disputes include:
- Arguments over repairs or maintenance
- Late payments
- CAM fees
- Breach of contract issues
To start with, one of the most common causes of disputes is an argument over repairs or maintenance that needs to be done or that was done inappropriately. For example, if your lease has a clause stating that the landlord is responsible for repairs, finding out that a tenant made repairs, and that they are not done well, could be problematic.
Another common issue arises with late payments. When payments are late, tenants have already breached the contract. Late fees and penalties add up, and some may refuse to pay. Disputes over this issue is common.
Subleasing is another issue to address in your leasing agreement. Do you want to allow subleasing of a space? If not, make sure you write it in plain form that you’re only leasing to the tenant and not anyone else they’d let into the space.
Finally, there are sometimes disputes over common area maintenance fees. Make sure that your tenants understand that they will have to pay for maintenance for common areas, like seating areas in a mall or hallways in a shared space. Tenants may challenge how much is owed, but a simple paragraph in your contract could prevent confusion or arguments in the future.
Drawing up a solid commercial lease will help minimize the risk of disputes, but you may not be able to avoid them all. If an issue arises, it’s smart to know your legal rights and obligations, so that you can work towards a solution.