Navigating the Commercial Lease

Have you ever been intimidated by a legal document or truly believed in your entitlement to something only to find out things were not as you thought?

I don't recall how many times I have been in a board room or at a client's place of business to help untangle a situation and alleviate frustrations because of an Offer to Lease or a Lease conversation gone sideways. 

In simple terms, the Offer to Lease is the document summarising and establishing a contractual obligation to proceed with the deal, where the Lease is more specific and governs the relationship between the Tenant and the Landlord throughout the Term of the Lease or lease extensions there of.  Ultimately, it falls on the parties to the Lease Agreement the responsibility to understand and carry out its content.  The document itself can be intimidating to the uninitiated but here are some tips to help get you started.  As with anything involving legal matters it is also best to involve a qualified lawyer. 

1. Consider that to minimize "he said, she said" statements the Offer to Lease and the Lease outline and define the terms of the arrangement.
2. Once the basic business terms are agreed on, ensure there is a signed or acknowledged record aligned with those terms (eg: a detailed Offer to Lease).
3. There are various levels of sophistication in Real Estate transactions and not all deals have the same documentation or detail.  Ensure the content covers your specific situation.
4. To protect either the Landlord or Tenant, it is advised each obtain independent guidance from a qualified lawyer.
5. Review the Lease Draft from start to finish.  We encourage you to take the time to go over the definitions.  This is important as within the definitions there are key words that if omitted or misinterpreted can result in considerable financial detriment or loss of opportunities.
6. Ensure the document includes a site plan detailing your Premises boundaries and its location within the building or land parcel and its boundaries so as to clearly delineate Common Area from the Leased Premises.
7. Ensure the right signing authorities are listed, signing and binding the deal. 
8. File the document in a secure place and remember that a Lease is an obligation but it can also be an asset in the event of a Sale or Transfer.  

At Molina Real Estate we offer years of experience navigating commercial Leases and can offer professional Lease review services aimed at identifying opportunities for our clients and providing expert opinions concerning recoveries, mediation, conflict resolution and education.  

Want to know more?  Please call us at (403) 620 2994 or via email at: info@molinarealestate.ca