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Tips for preventing commercial property lease disputes

On Behalf of | Jul 27, 2023 | Commercial litigation |

If you own commercial real estate, you understand all the ways you can earn an income from your property. However, your most immediate returns typically come in the form of lease payments.

Therefore, any dispute between you and your tenant can have a significant impact on your income. These are some tips to help you prevent lease disputes on your commercial properties.

Plan for conditional obligations

Conditions are if-then clauses. If one thing happens, then your commercial lease will adjust to accommodate. For example, if the tenant puts in a parking lot, the rent will decrease by $500 per month for the next three years. Make sure any condition you put into the lease is not contingent upon a third party’s actions. In addition, you should make a plan to maintain or increase your income upon the fulfillment of these conditions.

Always consider business growth

If you own the property, you can decide what can and cannot occur. You should always know what your tenants plan to do with your assets, but you should also understand the company’s future plans and whether you want to accommodate them. The lease you formulate should accommodate your tenant’s current business without restricting the company’s growth through strict use clauses.

Get everything in writing

Common disputes often occur when you do not include the specifics in the lease. You could think that the condition or term is common sense, but if it is not written down, it is up for interpretation. You should write every detail, even something you consider small, in your lease to prevent disputes.

To avoid costly disputes, create detailed leases that accommodate both your business plans and those of your tenants.

Founding Partners Damaso W. Saavedra and Allyson D. Goodwin