When engaging in commercial property transactions, whether leasing, selling, or entering into brokerage agreements, it is crucial to have all contracts reviewed by a legal professional. These contracts are often complex and outline obligations that can have significant financial and operational consequences. By having an attorney review the lease or sales contract, property owners and tenants can ensure that the terms are fair, enforceable, and aligned with their interests. The attorney can identify any unfavorable clauses, such as hidden fees, excessive penalties, or ambiguous terms that could lead to disputes later on.
One of the biggest categories is cure notices. A cure notice is what duration of time the non-offending party has to give the offending party in order not to be in breach. Sprinkled throughout most commercial leases are several cures that can range from late payment to bankruptcy or even abandonment of the premises, where the tenant removes (or does not) business property and does not come back. Under Texas law, commercial lease terms dictate the party’s rights. There are very limited amounts of statutory law in commercial leases versus residential ones.
How a Lawyer Can Be Beneficial
The reason is that commercial leases are assumed to be conducted by business professionals who understand the terms of the lease and will have them reviewed by competent counsel before signing. An example, (while extreme for emphasis ) could be this: the parties agree that if the tenant is not timely in paying rent by the 3rd of the month, the tenant must stand dressed in a tutus outside the property manager’s office and sing “I’m a little teapot” one rendition for each delinquent day prior to making any further lease payments. Ridiculous? Yes. Would it be legally binding? Probably, if both parties have signed.
In the case of brokerage agreements, they can ensure that commission structures and duties are clearly defined, and avoid potential misunderstandings. The critical clauses will be what are the actions of the broker that would trigger payment of the fees, and what happens if the fees are not timely paid.
Commercial property contracts often contain clauses related to liability, maintenance, insurance, and zoning compliance, which can vary widely from one contract to another. A lawyer’s review helps ensure that these provisions are clear and that the parties are fully aware of their rights and responsibilities.
It's All In the Details
For example, although most know what a triple net lease is (tenant provides all maintenance and upkeep of leased facilities), are you also reviewing what may be the landlord’s responsibility? What happens if the pipes freeze and break? What happens if you are a small take-out restaurant and the bar next to it continually uses the spaces reserved for pick-up customers? Also, Signs. How big? Do they have to be lit? and on and on.
Commercially leases can be customized for your business environment and should have clauses within that allow the facility to be most useful for your type of business. For example, if you construct items in your leased space, lease noise restrictions during the workday may conflict with your ability to conduct business. So, after you sign the commercial lease, it is not a good time to find out that your custom-built steel table shop is next to the Care Institute for the Sufferers of Loud Noises.
Schedule a Consultation
Having a professional review the contract provides a layer of protection, reducing the risk of costly errors and ensuring that the transaction is conducted on a solid legal foundation.
Should you wish your commercial property transaction be reviewed by real estate attorneys, contact the Sprigg-Novak Law Firm at 214-216-1667 for a consultation.
