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Be wary of these red flags in a commercial lease

On Behalf of | Dec 23, 2021 | Business Law |

Ohio commercial leases often have longer durations than residential leases, so it becomes extra important that you understand what you are getting into before you sign your commercial lease. Sometimes, commercial landlords may bury complicated legalese within your lease that may have a substantial impact on your business moving forward. So, it is advisable that you have someone other than yourself review the lease before you make things official.

When combing through a proposed commercial lease agreement, there are certain things you may want to look out for that could come back to haunt you later. Think twice before signing a commercial lease that contains any of the following red flags:

Unreasonable tax-escalation provisions

The inclusion of a tax-escalation provision, or a provision dictating that you may have to pay extra rent when taxes rise, is common in a commercial lease. However, this is an area you need to review carefully to make sure that the escalation is proportional to the amount of space you are going to occupy.

Extended lease terms

If a commercial lease lasts longer than two years, you really want to do your due diligence before signing the lease agreement. Be wary of any commercial lease that lasts longer than two years. Also, you may want to reconsider signing on at a property that requires you to renew the commercial lease for at least two years at a time or longer.

These are some key areas to be on high alert for when signing a commercial lease. If a lease appears too perfect or too good to be true, there is a good chance that it is.


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