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Lessor, lessees: Have an attorney review your commercial lease

Most American adults have rented an apartment and are familiar with the basics of a residential lease. It spells out everything from who can occupy the apartment, to the terms of the rent and the security deposit, to who is responsible for paying the utility and water bills.

But most of us are unfamiliar with commercial leases, and if you're considering entering into one in Louisiana, here's the first thing you need to know: They're much more difficult to create if you're the building owner and much more complex to understand if you're the one seeking a commercial property for your business.

There are a number of elements every commercial lease should include. Here's an outline:

Rent amount

The monthly rent should be figured based on the square footage. Does the square footage include such things as the elevator? Who will pay for utilities, the property taxes, insurance and repairs? (Remember those elevator repairs can get expensive!)

Rent increases

Commercial lease agreements will usually include a provision for an annual rent increase. The two parties can negotiate an annual cap.

Security deposit

How much is the security deposit, and what will keep you from getting it all back?

Lease length

Landlords generally favor longer leases, but that might not be wise for startup businesses.


What modifications or improvements can be made? Who will pay for them? Must the property be returned to its original condition when the lease ends?

Property description

The lease should spell out which areas of the property are part of the lease. Is there exclusive use of the restroom or a parking area?


What rules – of both the landlord and the town or city – apply to business signage?

Use clause

Just what activities can take part on the property?

Exclusivity clause

This prevents a landlord from renting nearby space to a competitor.

Assigning and subletting

If you decide your business isn't going to work or it works so well that you need a bigger space, can you sublet to another business?

Compliance with the Americans with Disabilities Act (ADA)

Who will pay for the modifications to make the space compliant with ADA laws?

As you can see, commercial leases are much more complicated than residential leases. Landlords should have legal assistance in writing them; prospective tenants should have a qualified attorney review it before they sign. Both parties will benefit.

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Stephen Hawley Myers, LLC
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