Skip to content
gl-white

Commercial and Residential Leases

Commercial and Residential Leases Attorney

There are not many inherent protections when it comes to lease agreements, so an improperly drafted agreement could cost you. Let’s examine the differences between a commercial and residential lease and how each are protected.

Residential Lease Agreement

A residential lease agreement is a contract between an individual tenant and the landlord to use property for his/her living arrangement. A typical residential lease for housing includes a home, townhouse, condominium, and an apartment. The property is primarily used for a residence, not for a profit. The rent for the occupier of a residential rental is typically based upon a set amount per month varying from a month-to-month lease to a term of years.

Protections for the Residential Tenant

Because of the value placed on safe and secure housing, all governmental entities have a special interest in protecting the rights of the individual residential tenant from an unfair landlord. There is an assumption that individuals who enter into a residential lease do not typically have the skill, knowledge, or sophistication of a commercial tenant whose interest is to make a profit in his business venture. As a result, every state has built in protections for the residential tenant stemming from the landlord’s failure to provide required safe and habitable housing to the landlord’s failure to timely return a former tenant’s security deposit.

Commercial Lease

A commercial lease is a contract between a business tenant and landlord for use of commercial property to generate a profit through the sale of goods, services, or manufacture of a product. The premise is a business space not designed for sleeping and day-to-day living for the residential tenant. The commercial property typically is a warehouse, strip mall, or office space in an industrial or commercial building. The rent is typically based upon the amount of square footage occupied by the tenant plus, in some instances, a percentage of the gross received by the tenant. The term of the lease is typically for a set number of years where upon near the end of the term, the tenant has an option to renew for another set term.

Few Protections for the Commercial Tenant

There is little to no protection for the commercial tenant in his/her business arrangement with the landlord. Unlike the residential tenant, the commercial tenant is presumed to be on equal footing with his/her landlord in negotiating a commercial contract. The assumption is made that the commercial tenant has the training, experience, knowledge, and sophistication to enter into the written commercial lease along with access to skilled third-party professionals. The commercial lease is also harder to break than a residential agreement with the renter. If the tenant is an entity, the landlord generally requires a personal guarantee by the individual owner that he will make good on the contract should the tenant entity fail to make the monthly payments.

Hire a Gravis Real Estate Law Attorney

Let our experienced real estate attorneys draft the agreements for you, so you aren’t caught unprotected. Our knowledge of real estate law and real estate litigation will provide you with the quality and personalized help and tools you deserve. We look forward to assisting you through your real estate matters and beyond – making the process as smooth and uncomplicated as possible.

Begin your consultation.

Sign up to Stay Connected

Stay current with events, news, and goings-on at Gravis Law.

*By clicking "Subscribe", you accept the Terms and understand our Privacy Policy.

Something went wrong. Please check your entries and try again.