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What should I consider before signing a commercial lease agreement in California?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I would advise you to consider the following before signing a commercial lease agreement in California:

  1. The lease term: You should carefully review the duration of the lease, as it may have a significant impact on your business operations. Consider the potential growth and expansion of your business to determine whether a longer or shorter lease term is appropriate.
  2. Rent and other payments: Ensure you understand the amount of rent and any additional costs that may be incurred, such as operating expenses, property taxes, or maintenance fees. It is also essential to understand the payment structure, such as when and how payments are due.
  3. Security deposit and other guarantees: Review the amount of the security deposit and any other financial guarantees required under the lease agreement, such as personal guarantees or letters of credit.
  4. Permitted uses: Be sure to review the permitted uses described in the lease agreement. If there are any limitations that may impact your business operations or future expansion plans, it should be addressed before signing.
  5. Repairs and maintenance: Review the lease regarding the landlord's obligation to repair and maintain the premises. You should also consider the allocation of repair costs between you and the landlord.
  6. Termination and renewal: Be sure to understand the conditions of terminating the lease agreement and any renewal options.
  7. Assignment and subletting: It is possible that your business may change, and you might need to sublease or assign your space. Review the lease provisions regarding assignment and subletting.
  8. Governing law: Ensure you understand the governing law provision in the lease agreement. It specifies which state's laws will govern any dispute or litigation that may arise from the lease agreement.

In conclusion, it's vital to carefully review the lease agreement, seek professional assistance from a lawyer, and negotiate any unfavorable or ambiguous provisions. Always ensure that any changes to the lease are in writing, signed, and dated by all parties involved.