COMMERCIAL LEASE ANALYSIS

What is the distinction between a “commercial” and a “residential” lease? How do the differences in use of the leased property impact the terms of the lease? In a commercial lease agreement, should the law seek to protect the interests of the commercial tenant more than the interests of the commercial landlord? Why or why not?

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  • residential lease is a contract between a landlord and a tenant for the use of a dwelling unit. A dwelling unit is a place where people live, such as an apartment, house, or condo.
  • commercial lease is a contract between a landlord and a tenant for the use of commercial space. Commercial space is any space that is not used for residential purposes, such as a store, office, or warehouse.

The differences in use of the leased property impact the terms of the lease in a number of ways, including:

  • Term: Residential leases typically have shorter terms than commercial leases. This is because residential tenants are more likely to move frequently, while commercial tenants are more likely to stay in place for a longer period of time.

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  • Rent: Residential rent is typically based on the number of bedrooms and bathrooms in the unit. Commercial rent is typically based on the square footage of the space.
  • Security deposit: Residential security deposits are typically one month’s rent. Commercial security deposits are typically two or three months’ rent.
  • Utilities: Residential tenants are typically responsible for paying for their own utilities. Commercial tenants may be responsible for paying for some or all of the utilities.
  • Use of the property: Residential tenants are typically restricted from using the property for business purposes. Commercial tenants are typically allowed to use the property for any lawful purpose.
  • Lease termination: Residential leases can be terminated by either party with proper notice. Commercial leases are typically more difficult to terminate, and may require the consent of both parties.

The law does not seek to protect the interests of either the commercial tenant or the commercial landlord more than the other. The law seeks to balance the interests of both parties in order to create a fair and equitable agreement.

However, there are some cases where the law may give more weight to the interests of one party over the other. For example, the law may give more weight to the interests of the commercial tenant if the tenant is a small business owner who is struggling to make ends meet.

Ultimately, the terms of a commercial lease agreement are determined by the parties involved. The law provides a framework for the negotiation of these terms, but it does not dictate the specific terms of the agreement

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