Commercial Lease Agreement – Guide For Tenants

commercial supply agreement

Commercial Lease Agreement

A commercial lease agreement works as a guide for tenants. It’s a document that guides tenants in terms of responsibilities and areas that affect their rights. It clarifies what is involved in the tenancy. It also defines the meaning of words in the document, such as ‘Tenant’, ‘Lease’, ‘Title’. Although seemingly obvisous, the jargon is defined in legal terms, including implications involved in those terms. For instance, ‘Tenant’ means the person who pays rent. But the definition of ‘Tenant’ will include liability, responsibilities and who are the successors in title.

Tenant Absence

Unexpected occurences befall us all. Insolvency and bankruptcy, hard times, failure to pay rent and sudden lack of funds to cover for repairs. But suppose something happens to the tenant. Who’ll be in charge, who’ll run the business, who’ll pay rent and bills? Who’s liable? If anything happens to the tenant, rendering them incapable of running the business, the successors will be liable. Provisions for successors must be made and this should be stated in the commercial lease agreement.

Successors Are Binding In Commercial Lease

Successors are legally binding in a commercial lease agreement. They are like guarantors in a mortgage application or a short hold tenancy agreement. But successors have far more responsibilities. A lease agreement could include the following narrative in a clause: “Except where the context renders it absurd or impossible every reference to any party to this Lease shall include his or her successors in the title and personal representatives, by and against whom this Lease shall be enforceable as if they had been originally named as parties.” This means should something happen to the tenant, the successors will be responsible for the lease.

Finding Successors

Think about your successors and their liability. Are the successors capable of complying with obligations as set out in the lease? Your successors should be aware of their liability, should anything happen. Also, there’s the possibility of omitting successors in the lease. Discuss this with your lawyer initially for some legal and sound advice, then consider asking your landlord to change the difinition of ‘Tenant’ and ‘Title’, so that it doesn’t include successors.

If you have any concerns with a lease, please give us a call for a no commitment initial discussion. We’re property solicitors with extensive experience in business law and commercial leasing. SG

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