Provided that everything goes well, a commercial lease can largely regulate the relationship between landlord and tenant and help minimize conflict. In some cases, disputes may arise because of the terms of the lease or issues not addressed in the lease documents.
Landlords and tenants may find themselves arguing about responsibilities, finances and other business matters. The following are some of the most common sources of conflicts between the parties who have signed commercial leases.
Concerns about maintenance
Commercial leases sometimes make landlords responsible for facility maintenance. Other times, tenants have an obligation to perform certain repairs and maintain the space they occupy. Landlords may pass on the costs of any maintenance and repair services that they provide in the form of monthly fees. Landlords and tenants can end up arguing over the costs of such services or who is responsible for specific work at a unit. The broader the language and the initial lease, the more likely it is for the parties to disagree about individual obligations.
A desire to end the lease early
Perhaps the business tenant has not achieved success and cannot continue operating because the company doesn’t generate enough revenue. Maybe the company has grown to a point where it needs a bigger space. The commercial tenant may want to end the lease early even though they still have multiple years of rent obligations ahead.
Landlords and tenants may disagree about the early lease termination. The lease may include terms prohibiting the assignment of the lease to others or may allow lease assignment in certain circumstances. There might even be a force majeure clause that the tenant wants to invoke to justify terminating the lease early due to operational challenges. Landlords and tenants often have very different perspectives on when lease termination is necessary and how to handle that process.
Changes to the use of the space
Adjusting what the company offers the public can allow a struggling organization to bounce back from a temporary period of hardship. However, leases might restrict the use of the space to specific activities. Landlords sometimes prevent tenants from having customers and clients directly visit the space or from installing machinery to pursue a different business model than the one originally proposed. There may then be disagreements about whether the tenant can terminate the lease or modify the original agreements to suit the new needs of the organization.
Disputes about commercial leases are sometimes easy to resolve if the actual lease documents address that exact scenario. Otherwise, both parties may need assistance reviewing the lease and negotiating for an appropriate resolution. Carefully evaluating commercial lease documents is a crucial step for those facing a dispute with a tenant or a landlord. Disputes can lead to additional expenses and can damage the working relationship between a tenant and their landlord if they do not resolve the matter quickly.