Committing to a commercial lease for your business comes with a significant amount of liability. Compared to a residential lease, the consequences of breaking a commercial lease are far more significant. Commercial leases are more complex and residential leases, and many commercial leases have highly specific provisions regarding build-out, usage, and maintenance.
The commercial lease also typically has clauses that discuss what will happen if one party breaches the commercial lease, what form of dispute resolution the parties must use, and what state law will apply. If you are involved in a commercial leasing dispute, it is important to speak with a lawyer as soon as possible. Your lawyer will be able to review your case and formal legal strategy, helping you resolve your commercial leasing dispute effectively.
Review the Contractual Terms of Your Commercial Lease
If you are involved in a commercial leasing dispute, your commercial lease agreement will govern the dispute. The parties in a commercial lease agreement have their unique rights under their specific lease, but these rights vary widely. You will need to understand all of the terms of your commercial lease agreement to understand your legal options better. For example, if your commercial lease agreement requires that you go through binding arbitration, you will not be able to bring a lawsuit. Commercial lease agreements usually include standard clauses, giving the tenant the right to quiet enjoyment or ensuring that the property does not contain any seriously dangerous toxins like radon.
Many commercial leases have more specific provisions that are unique, depending on the property’s intended use. For example, a commercial lease for a restaurant that serves alcohol may need a venting unit. A retail tenant may need specific rights to access the public street for deliveries and drop-offs in the lease. Hopefully, the terms in your lease are solid and straightforward. Still, in many cases, the lease terms can be vague and interpreted in different ways, making a commercial lease dispute more challenging.
If You are a Tenant, Understand Tenants’ Rights
In addition to the rights outlined in the commercial lease, tenants and landlords also have rights provided to them under state and federal laws. If you are a tenant, you enjoy specific rights provided by law that become enforceable after signing the lease and moving into the property. When the landlord fails to follow the commercial lease terms, there are numerous remedies available to you.
For example, if your landlord fails to maintain and repair the property as required by the lease, you can demand that the landlord make the necessary repairs. You also have the option of making the repairs yourself and then sending your landlord a bill for the repairs. This type of mediation is called specific performance, mandating that the landlord take certain actions. Tenants can also seek an injunction that stops the landlord from taking specific actions. Finally, tenants can request monetary damages related to the breach of the lease agreement by the landlord.
Remedies for Landlords in Commercial Lease Disputes
Likewise, there are certain remedies for commercial landlords when a tenant breaches the lease agreement. Landlords can seek monetary damage in many cases, including back rent payments and interest on unpaid rent. They can also collect legal fees, collection costs, the cost of repairs to damage property, compensation for lost profits, and attorney’s fees from the tenant. When the tenant fails to pay rent or has conducted activities that put the property at risk, landlords can pursue eviction and seek injunctive relief to prevent the tenant from causing any more harm.
Engage in Alternative Dispute Resolution
Even if you have a right to take legal action against your landlord, doing so may not be your best option. Engaging in a legal battle can become costly and time-consuming. Some landlords and tenants agree to go to mediation to avoid an expensive commercial lease dispute. During the mediation process, a third-party mediator will review both parties’ claims and help them come to a resolution out of court. The goal is to save expensive litigation fees while finding a resolution to which both parties can agree. Some commercial real estate mediations can occur in less than a day, saving both parties significant money and time.
Try to Find a Creative Solution
A mediator can help both parties try to find a creative solution so they can avoid litigation. The litigation process is not meant to encourage creative thinking or to resolve conflicts. However, a mediator who is experienced in commercial real estate agreements may be able to help you find a creative way to address your legal issues. Mediators do not favor one side but focus on providing a neutral forum in which parties can come to an agreement. Mediators may help the parties find a solution that is not within the lease agreement but meets the needs of both the landlord and the tenant.
Hiring a third-party mediator or working exclusively with your attorneys can also help you keep your dispute confidential. You may not want information about a dispute leaking out to the press and hurting either of your reputations as a landlord or commercial tenant. You can require that the mediation process remain confidential, avoiding the public’s potential to get information about it should you go to court. Engaging in third-party mediation can also help you maintain your professional relationship with each other. In these difficult financial times, landlords do not want to lose tenants, and moving can be a hardship for many tenants. Maintaining a business relationship can be important for both parties.
Contact a Commercial Lease Dispute Lawyer Today
If you are involved in a commercial lease dispute, you need an experienced lawyer on your side. Contact the lawyers at Thomas Weiss & Associates today to schedule your initial consultation and learn how to help you resolve your commercial lease dispute.