As a human being, we are not perfect creatures. While human beings are much more advanced than other life forms, we are far from infallible creatures. In fact, it seems no matter how much more innovative the human race has become, it seems like there are certain pitfalls that we just cannot seem to escape. The biggest part of being human is to know that we are bound to make mistakes. Some mistakes are minor and not much worth talking about even the very next day. However, some mistakes are so big that they seem to penetrate every facet of our lives and have the power to haunt us forever. As a business owner, knowing that you could make a mistake that you would regret for years to come can be an unsettling thought. That is why it is important as a business owner to know when you should consult with a business law attorney. Signing a commercial lease without consulting with a qualified business law attorney first is the perfect example of a mistake that can have far-reaching negative effects.
It is critical to have a business law attorney review a lease agreement since commercial leases by their very nature are skewed towards landlords as they are written by the landlords. As a business owner, this means that commercial leases often contain numerous provisions that unfairly favor the landlord. Areas that are of particular concern include the following:
- Lease term. A long lease normally benefits the landlord while a shorter lease term favors the business owner. It is important to negotiate this area of the lease since commercial leases are not easy or without significant financial cost to break.
- Renewal clause. Once you find the perfect spot for your business, you want to make sure that you can keep your business at the location for as long as you see fit. Some leases have unfavorable renewal clauses or have no option to renew at all.
- Fee provisions. In addition to the monthly rent, tenants are usually responsible for a share of the CAM or Common Area Maintenance fees. CAM fees are similar to the fees condo owners pay in addition to their mortgage. CAM fees can vary greatly from lease to leave and in some cases can exceed the monthly rent.
- Oral promises. While oral promises are in certain cases enforceable, it is always better to have every term related to a lease contained in writing within the lease documents.
- Hidden provisions. Often buried within a commercial lease are terms that can be quite detrimental to a tenant. One such term is personal guarantee clause. A personal guarantee clause is problematic because it opens a business owner up to an attack on their individual assets, something is otherwise not possible given the protections of incorporation.
If you are a business owner, who is considering signing a new lease, consult with a business law attorney first. Your attorney will discuss any potential pitfalls in the proposed lease and negotiate more favorable terms on your behalf.
As a business owner, it is important to find a Kansas City Business Law Attorney who knows and understands your business’s special needs. At Hubbard & Kurtz, L.L.P. our experienced Business Law Attorneys are dedicated to helping our clients protect their business. Our attorneys have assisted clients in both Kansas and Missouri with their business needs for almost two decades. At Hubbard & Kurtz, L.L.P. we understand the needs of business and want to be there for your business. No matter what your business needs, our team of attorneys can handle it all. To discuss your business needs with one of our seasoned business law attorneys, contact our office today at (816) 472-4673 to schedule a consultation.