Renting Commercial Space without a Lease

The laws for renting commercial space are not the same as the laws for renting a home. Some states have very lax laws, whereas others have very stringent laws–it will all depend on which state you are renting in. If your state laws do apply to renting commercial space, check to see if it is mandatory to have a lease agreement. If it is, you can then request an agreement from your landlord.

It is better to rent commercial property with a lease agreement, given the possible liability associated with renting. For example, if someone does not have a lease and their property owner decides to sell the property where the business is located, there is no lease to prevent the new owners from giving notice that they would like you to vacate the property. Without a lease, the new owners would be able to tell you to find a new location for you business.

Can Be Evicted Early

Having a lease is also a good idea when you are renting and have placed money into fixing up the commercial rental property. These repairs or improvements could have been made under the belief that your business would continue to stay in that premises for a long time. However, your landlord can evict you without a lease even if you have made improvements to the property. These improvements can even help the proprietor rent out the property again. Since you would have no legal and binding contract such as a lease, filing a lawsuit for the costs of improvements made could result in a long legal battle. Some people decide to restore the improvements to the original condition if this is possible.

No Repairs Need Be Made

In addition, without a lease, the landlord is not really held liable for any repairs to the building. They are required to ensure health and safety based on state laws though. However, if the repair is not directly related to a health and safety issue, then the property owner can take his or her time making the repair. This is especially true if these are cosmetic repairs.

Rent Can Increase

Yet, the main danger of not having a lease in regards to renting commercial space is the ability of the landlord to increase the rent to whatever they would like. Without a lease, the tenant can be told of a rise in rent from the previous month. There will be nothing to stop a commercial property owner doing this when no lease agreement is in place.

Talk to a Real Estate Attorney

If you find yourself without a lease and renting a commercial space, it is advised to seek the advice of an attorney who is skilled in handling commercial real estate.