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Tag: business agreements

Legal Considerations Before Signing a Commercial Lease

business lawyer

Most entrepreneurs do not understand that in a commercial lease the leasing agreement is whatever the parties decide. There is considerably less legal protection for a business in a commercial lease than in common residential leases.

For example, in a commercial lease, the parties can opt out of many of the protections provided for by California’s commercial landlord and tenant laws, whereas in a residential lease, a tenant cannot. If a business enters a commercial lease waiving some of the statutory protections provided by these laws, a court called in to resolve a dispute between the parties, at a later date, may only consider the commercial lease as it is written and signed by the parties.

1.    Know which lease terms can be adjusted

Just as there are customs and practices in your trade or industry, there are also customs and practices in commercial real estate leasing that are hyper local or specific to the leasing agents or commercial property owners in your area. Make sure you understand which terms in a standard commercial lease can be adjusted before you start negotiating the terms of your own commercial lease.

2.    Be prepared to provide a personal guarantee or walk

Some landlords require new business owners or shareholders to personally guarantee the commercial lease. This typically eliminates the very legal protections obtained by creating a corporate entity in the first place. There is limited room to maneuver an alternative option. Be prepared to walk and continue your commercial space hunt if you’re not comfortable offering a personal guarantee of your business’ commercial lease.

3.    Build in an option to grow

Businesses are formed to make a profit. When businesses are successful, they grow. The initial commercial space needed to launch a business may be quite different from the commercial space needed to maintain and grow it. Make sure your commercial lease reserves the right to relocate if your commercial space no longer works for your business and contains an exit strategy that would allow you to amend or terminate a commercial lease early. However, it may be important to prevent the landlord from having the option of moving you from an ideal space to a less desirable location. Any relocation clause in the contract should provide flexibility but not give too much power to the landlord.

4.    Hire a business lawyer

Commercial property owners, real estate development companies, and leasing agents are very knowledgeable about the power they possess to demand terms from businesses that may not be in their best interest. Seek the advice and legal counsel of knowledgeable commercial real estate lawyers to help you negotiate your commercial space lease, before signing.

If you are a new business in Fremont, Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, or Santa Clara, CA venturing into your first commercial space lease you should be aware of the following before you sign your first commercial lease or renew their next one if saddled with unfavorable terms in their current lease.  Talk to The Law Firm of Lynnette Ariathurai when you are reviewing or preparing to sign a lease agreement, you will be glad you did.

business agreements, business lawyer, commercial leases, personal guarantees

A Legal Expert Should Be Reviewing Your Businesses Documents and Agreements

Business Attorney

Here’s Four Really Good Reasons

Many businesses don’t often hire independent counsel to review their business documents. The documents in question can range from a simple sales contract between your company and a new client, to a commercial space lease for a new location, to a complex asset sale agreement to sell or purchase an asset, product, or business.

It’s quite easy and natural for the Owner, Principal, or President of the company to review and sign-off on any contract that crosses his desk. Who better than the Owner, Principal, or President is most versed in the business and its products, markets, and services?

The Owner, Principal, or President of the business along with the business unit seeking the contractual relationship is most certainly the expert on the subject of the deal. The internal review is just one aspect of the review process for a legal document. When the document in question is a legal document or agreement, a legal expert should be brought in by the business to offer a legal perspective. It is critical for a legal professional to take a look before the document is signed and presented to the other party for approval.

Here are four really good reasons why in your next review of a business agreement you should strongly seek a legal expert to help you legally interpret and analyze the document:

1.    The cost of skipping an attorney review of your business agreements could put you out of business in comparison to what it costs to have someone review the documents and analyze the deal before signing the agreement.

2.    An attorney review of your business agreements can offer a fresh legal perspective and provide you with advice of current customs and practices in your industry relating to contracts.

3.    You are not an expert at contract interpretation or the law if a dispute arises. A lawyer is able to provide clients with interpretation and analysis of the law in your jurisdiction to the facts of your contract and/or potential dispute. No other professional is able to do that. Especially if a mistake was made during the contract formation or execution process, a lawyer can help your business solve the problem and defend your company in court when a deal goes sideways.

4.    A business lawyer is also your legal representative. During the drafting and negotiation of the contract, a business lawyer can stand in your place, negotiate with the other party’s counsel, and provide you with actionable intelligence on points in your agreement where you can influence or change terms to protect your business and receive a favorable outcome.

If you are a business in Fremont, Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara, California, seek the legal advice and counsel of a business lawyer.  The Law office of Lynnette Ariathurai is ready to help.

business agreements, business contracts, document review, legal representation