Home Legal Chats Real Estate I received a commercial lease agreement for a fitness studio.

I received a commercial lease agreement for a fitness studio.

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Dolan W.
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10 Yrs Experience
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Customer:
Asked on Nov 19, 2024

I received a commercial lease agreement for a fitness studio.

What are the terms I need to be aware of?

This is my first time dealing with a lease agreement. Any pointers you can provide would be greatly appreciated. I'm also happy to copy and paste some of the clauses here if that is helpful.

Lawyer Dolan W.
5.0 (315)
Lawyer:
Answered on Nov 19, 2024

Hello ***! Thanks so much for coming to contractscounsel.com. So in my experience, there are specific things you must pay attention to: 1. The first is rent and expenses. I always recommend that parties pay very close attention to the rent amount, how it's calculated (e.g., per square foot), and whether it increases over time (e.g., annual escalations). For commercial leases, issues like repairs and upgrades are flexible unlike in residential tenancy agreements. So what this means is that you should clarify what expenses you're responsible for. For example, many tenants are responsible for property taxes, insurance, maintenance, and utilities. 2. The second is concerning the terms and the renewal. Consider whether the term aligns with your business plan and if there are options to renew. Renewal options may come with predefined rent increases or require negotiations. 3. Third, pay attention to "permitted use" issues. Generally, the landlords want you to be very clear on what you intend to use the property for and require consent for any changes Ensure the lease clearly states that you can operate a fitness studio in the space. There might be restrictions on specific activities, equipment, or operating hours. 4. Fourth, if you need to renovate the space, review the lease clauses regarding construction, permits, and who pays for improvements. You might need landlord approval for any changes. 5. Fifth, understand your insurance obligations, including liability coverage for potential injuries on the premises. The lease may require you to name the landlord as an additional insured. 6. Sixth, familiarize yourself with the circumstances under which the lease can be terminated by either party. This typically includes non-payment of rent, breach of contract, or damage to the property. 7. Seventh, and often overlooked is you need to make sure the space complies with accessibility regulations under the ADA and that the lease addresses any necessary modifications. Many landlords agree to make modifications to the outside of the building according to the ADA, and to provide appropriate accessible parking; however, you would be responsible for the internal ADA compliance. 8. Security is the final thing I suggest looking for. Will the landlord provide security to the tenants, such as a security guard or some roving patrol? Will you be allowed to affix cameras to the building? Security is important. Please let me know if this has answered your question fully. I hope this information is helpful to you. If you need additional assistance or have follow-up questions, please let me know! If you need to copy and paste specific clauses for my review, I'd be happy to take a look! Dolan

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Customer:
Asked on Nov 19, 2024

Wow thanks for being thorough. This looks a bit more complicated. How much would you charge to review it? It is 31 pages. To my knowledge, the landlord is NOT providing a security guard. Should we ask for that? FYI - this is a new building and we would be the first tenants. The landlord knows we're a fitness studio, so I think there shouldn't be an issue with permitted use. I am worried about trying to negotiate and turning the landlord off since we really want the space. Is it common to negotiate terms? If so, what terms would be the least 'offensive' if you know what I mean...

Sorry for more questions - just want to make sure I cover everything. Would seriously consider getting it reviewed too since what you wrote seems abit complicated.

Lawyer Dolan W.
5.0 (315)
Lawyer:
Answered on Nov 19, 2024

It's my pleasure! To your questions: 1. For a 31-page document, the estimated charge is $***; 2. If the landlord is not providing a security guard, my recommendation is to ask. You can always ask other tenants as well if you feel comfortable. If there is a security guard, landlords typically make this obvious to you; 3. It's normal to worry about trying to negotiate. It's common to negotiate the terms. I can always review the terms to help determine if it's even worthwhile. If you do decide to negotiate, one little known, but very effective tool that lawyers use to settle matters outside of court is called principled negotiation.  All this means is that you are looking to get something done on the basis of principles, even if you can’t find a law to support you.  It takes the anxiety out of dealing with the other side because you’re focused on the facts, not each other.  With that said, here are some simple steps you can follow: Figure out what the other side’s interests are (saving money, saving time, etc.?); Think about what your interests are (saving money, saving time, etc.?); Come up with 2 to 3 reasonable and objective ways to solve the problem; Present it to the other side; If the other side rejects, ask them, “Is there a reason why you do not feel it is necessary to negotiate?” Consider what your best alternative to a negotiated agreement is.  This will give you confidence that no matter what, you'll have an option. Of course, these are just building blocks to get the other party to help solve the dispute.  Believe me when I say that good lawyers use this technique all the time to keep things out of court.  You’ll find that it is very effective even with the most stubborn of individuals. Best of luck to you!

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Customer:
Asked on Nov 19, 2024

Sounds good. Can we hop on a quick call? I think I want to hire you to review it and potentially help with negotiations. $*** seems reasonable since this lease is going to be a big investment for us.

Possible to send your phone number? Or some type of scheduling link?

also - do we work in this platform if I hire you to review the commercial lease?

[FILE UPLOAD]

I've just uploaded it for you to take a look at to make sure you're good to help us.

Thanks again!

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Dolan W.
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10 Yrs Experience
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Dolan W.

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San Diego, California
10 Yrs Experience
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Purdue Law School

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