Residential Agreements and Commercial Leases: Key Differences in 2018
Whether you`re looking to rent a property for personal or business purposes, finding the right lease agreement is crucial. The legal requirements and terms of the lease differ significantly depending on whether the property is residential or commercial. Here are some of the key differences to keep in mind when considering a residential agreement versus a commercial lease in 2018.
The most significant difference between a residential agreement and a commercial lease is the purpose of the property. A residential agreement is designed for tenants who want to rent a room, apartment, or house for personal use. In contrast, a commercial lease is for businesses seeking a space to conduct their operations.
In general, commercial leases tend to be longer than residential agreements. While residential leases are typically one year or less, businesses may sign a lease for several years or even decades. This extended lease period allows businesses to invest in their space and establish themselves in a particular location.
Rent for commercial leases is calculated differently than for residential agreements. In residential agreements, rent is usually a fixed amount per month, and it includes utilities such as water, electricity, and gas. In commercial leases, rent is typically calculated as a base rent plus expenses such as property taxes, maintenance, and insurance.
4. Maintenance and Repairs
In residential agreements, the landlord is responsible for most maintenance and repair work. The tenant is responsible only for minor repairs and replacements caused by their own negligence. In contrast, commercial leases often require the tenant to cover all repairs and maintenance costs throughout the lease term.
Businesses use commercial properties for specific purposes, such as retail, manufacturing, or storage. The commercial lease will specify the allowed uses of the property, as well as any restrictions. In contrast, a residential agreement typically allows the tenant to use the property for general living purposes.
Residential tenants are rarely allowed to make modifications to the property without prior approval from the landlord. In contrast, commercial tenants may be allowed to modify the property to suit their business needs, but only with prior approval from the landlord.
In summary, residential agreements and commercial leases differ significantly in purpose, length, expense, maintenance, use, and modifications. Therefore, it is essential to carefully review your lease agreement before signing to ensure that it meets your needs and expectations. And if you have any questions, don`t hesitate to seek legal advice.