ANNOUNCER: I’m with Faisal Nasim from Cohen Highley Lawyers. Is it risky for small businesses to negotiate commercial leases?
FAISAL: Yes. Typically, landlords have an advantage over business owners since they deal with commercial leases regularly while most businesses rarely do.
ANNOUNCER: How so?
FAISAL: Leases can push liabilities and responsibilities onto the tenant. For example, a lease could make you responsible to ensure the property is zoning law compliant or fire rated for the intended business. If it isn’t, you may still be responsible for the rent and additional payments, despite the fact you cannot even operate your business. Other tenants may already have excluded rights. There could be product restrictions or landlord consent requirements before offering new services. There may not even be competitor exclusivity.
ANNOUNCER: What else?
FAISAL: The lease could make the corporate tenant’s individual owner personally liable for rent and expenses, putting the guarantor’s personal assets at stake. I strongly recommend having any commercial lease reviewed by an experienced business or real estate lawyer before signing.
