Imagine you
are a small business owner. You previously operated out of your home but your business is booming and you’ve outgrown your space. That’s great news! Now you are looking at commercial spaces to rent. As you meet with various property managers and landlords, you may hear phrases such as offer to lease, basic rent, additional rent, common operating costs, leasehold improvements, guarantor, triple net lease, etc. These are not common terms in everyday language but often have very specific legal meanings that you may need help to understand.
Renting a commercial space is normally a two-step process: an “Offer to Lease” is signed, and then the commercial lease is signed. A commercial lease is a written agreement between the landlord and the business tenant. Potential commercial tenants need to know exactly what they are getting into before signing ANYTHING. Many potential commercial renters think that by signing an “offer to lease” they are simply agreeing to enter into further negotiations. But that is not necessarily the case and often such offers do in fact bind the tenant for the duration of the lease which in many cases can be 5 to 10 years!
Business owners need to ensure they understand what they are signing and should never feel pressured into signing anything which they do not fully understand. Property managers and landlords should give you an opportunity to seek professional advice on the implications of what is being signed. Never fall for “it’s just standard”.
The growth of a business is exciting, and very positive, but still remain cautious and ensure that you are fully informed of your rights, responsibilities and obligations before signing anything related to renting a commercial space. The Nova Scotia Residential Tenancies Act does not apply to commercial leases. You cannot rely on that system. If there is a dispute in a commercial lease which can’t be resolved, you will very likely end up in Court which can be expensive and time consuming. Know your rights and seek professional advice before signing any documents related to a commercial space.
Comments are closed.