Commercial leases & why it’s imperative to have legal representation

While both residential and commercial leases involve the rental of property, there are differences that are critical to understand if you’re entering a commercial lease.

To learn more about the legal considerations, we spoke with lawyer Harpreet Nahal from Lake City Law Corporation.

He explained that commercial leases are not governed by overarching consumer protection legislation like residential tenancies. Rights and obligations for both tenants and landlords vary greatly from one lease to another.

“Commercial tenancies don’t have the benefits of laws providing for rent controls, continuation on month-to-month terms or other protections against eviction,” he said. “Even an average lease form tends to be highly landlord-favourable. The rent you pay is typically only a portion of your actual lease cost and obligations.”

Nahal explained that commercial leases are actually very complicated legal documents for a few reasons.

• “Firstly, they have obligations that continue for years after signing, including during renewals, and situations simply change over time.”
• “Secondly, leases can include agreements within them such as options to purchase and rights of first refusal and other terms that are highly fact dependent.”
• “Thirdly, technical steps need to be followed after a breach to retain rights to certain remedies.”

Considering the massive impact to your business as a tenant and on the value of a commercial property for a landlord, both parties should also have an experienced commercial real estate lawyer help negotiate the terms not just the price per square foot.

Whether you’re entering the lease as the landlord or the tenant, Lake City Law Corporation’s lawyers can help businesses understand their rights and obligations to ensure the minute details buried in the 30-plus pages are to their benefit.

“The cost of a lease is often overlooked,” stated Nahal. “We try to alert businesses that the aggregate rent and additional rent, covering usage costs, repairs, maintenance, taxes and replacements, over the term and renewals is a huge number compared to the lease rate.”

Lake City Law’s experience includes work for landlords and tenants as small as local mom and pop shops and as large as national brands like Superstore, T&T Markets, Cactus Clubs, Vancouver Convention Center and many others.

“Our team provides proficient service that is practical based on our clients’ needs and bargaining power… we’ve likely helped a business you know, and we’d love to help you out as well.”

Lake City Law has several locations including in downtown Kelowna and Vernon. You can reach them at (250) 800-1077 and through the contact form at lakecitylaw.ca.