Commercial lease agreements
If you are planning to open a business and you don’t own premises where you can provide your services, you will have to rent part of a building and sign a lease agreement. You will either sign a new lease agreement or take over an existing one.
What type of lease should you choose ?
A TRADITIONAL COMMERCIAL LEASE AGREEMENT
The most common type of retail lease is the nine-year commercial lease agreement.
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SHORT-TERM LEASE AGREEMENT
This type of agreement is interesting for temporary shops, pop-up stores, and businesses that only want a lease for one year maximum.
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JOINT TENANCY
This type of lease covers shared space and the rent is split with another retailer.
Note: this concept is not defined in law. If you are interested in this option, you will have to find a formula that complies with the lease contract and the needs of the owner and of the tenants.
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The commercial use of the lease agreement
In the commercial lease contract, the purpose of the lease should be specified, i.e. the commercial activity that will be carried out on the premises. This protects the tenant from the lessor, who will not be able to ask him to carry out a different activity, and at the same time, it obliges him to limit himself to this activity once the lease is signed. This is why, as a tenant, it is in your best interest to specify the broadest possible purpose, so that you are not limited to one single business activity.
If you specify a broad use of the premises, you can change your activity without having to ask for prior authorisation from the lessor, as long as you remain within the limits of what is possible and set forth in the contract. The lessor will try to restrict the purpose of the lease as much as possible in order to keep control over the business activity carried out on his premises by the lessee or the person who takes over the business with the lease.
Do not hesitate to seek advice from a specialist in lease law for the revision or negotiation of the contract.
Do you need help with your commercial lease agreement ?
It may be helpful to get a legal opinion on the lease before you sign, for example, in case either you, or the lessor, add special clauses.
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What is key money ?
Key money is an amount the tenant agrees to pay at the time the commercial lease agreement is signed.
Key money can be viewed either as an addition to rent paid in advance, or as the valuation of a range of items: works, location, building characteristics, etc. It shouldn’t be confused with goodwill.
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