Unlike residential rentals, commercial leases (for retail, offices, industrial spaces) are highly complex, long-term contracts. Because they involve substantial capital investments, every single clause is critical.
1. Lease Terms and Renewal Options
Securing a renewal option is crucial for commercial tenants who invest heavily in fit-outs. Landlords, conversely, require clear conditions for exercising options, such as absence of prior breaches and timely written notices.
2. Rent Escalation and Indexation
In long-term leases, it is standard to increase rent during option periods (typically by 5% to 10%). Both parties must ensure the price adjustment formulas and Consumer Price Index link parameters are clearly defined.
3. Maintenance and Structural Repairs
A common source of litigation is repair liability. Typically, landlords cover structural repairs (roof sealing, foundations) while tenants maintain interior infrastructure (internal AC units, wiring, plumbing).