A commercial lease not only protects the interests of Owners/ landlords but also spells out rights for tenants. Being aware of your rights as tenants empowers you to address issues with your landlord and possibly take legal actions if required to resolve disputes as the case may be.
Let’s highlight a few important terms of a commercial lease which can protect the rights of the tenants-
1. Notice of Eviction
If you commit any material breach or default on any of the terms of the lease, the landlord has the right to end the contract and remove you from the leased premises. However, that doesn’t mean they can show up suddenly and demand that you vacate. A commercial lease will give you the right to a notice of eviction where the landlord will have to serve that written notice well in advance as agreed before the actual eviction date.
2. Permitted Use
The permitted use clause in a commercial lease spells out the activities that you would be carrying out in your office space or the building that you take on rent. This certainly is agreed upon while drafting the Lease. Your landlord cannot come to you in the future and tell you that you can no longer use the space in a way that is already mentioned in the lease. For example, if the lease says your company may carry out retail sales that require customers to visit your location, your landlord cannot ban visitors from entering the building.
3. Renewal Options
A commercial lease is designed in such a way that the tenure of the lease is divided into equal parts so that the tenant always has the option to renew the lease after the expiry of each term. Thus a Renewal clause protects your company from being forced to vacate at the end of any term. Unless there is a material breach by you on any commercial terms in the lease, the clause requires the landlord to give you a chance to renew the contract before offering it to any other prospective tenants.
4. Sublease Clause & Assignment
Sublease clauses are not part of every lease, but whenever possible, tenants should negotiate to have them included in the commercial lease. The right to sublease helps to ensure that companies can make effective use of any unutilized space in the event that their own business requirements undergo any change in the future. When you sublet, you retain control of the lease and another tenant or pays for all or part of the rent. In the case of the assignment, the new tenant assumes the lease, and the existing tenant can easily walk away from the lease.
5. Equality and Non-discrimination
The Indian laws and our constitution very clearly state the right to equality and prohibition of discrimination on the grounds of religion, race, caste, sex, place of birth, disability. And so the landlord has to abide by the same always, which thereby protects the interests of the companies.
6. Maintenance, Health, and Safety
It becomes the landlord’s prerogative to keep the building and your office space well maintained and in a condition that allows you and your employees to work safely and remain in good health. The landlord ensures that he hires a maintenance agency for the regular upkeep, maintenance, and hygiene of the Building complex. The tenant always has the right to request the landlord for any such repairs to be done on time by improving issues that pose health and safety risks.
7. Interruption in Business operations
Most commercial leases include the terms which stipulate that the landlord cannot interrupt your company’s daily business operations or activities to make routine repairs or improvements. It is only in the event of an emergency, the landlord may take actions to carry out the repair in the premises and that too after giving reasonable notice for the same. And such an emergency that requires your business to partly or completely closed, the landlord will have to notify well in advance.
You should always be aware that commercial leases may vary from deal to deal; the language used can also impact the rights available to you as a tenant. That’s why it’s always advisable to hire a specialist legal firm who are well versed with drafting and documentation so that they review your lease before you sign. The negotiations done on your behalf by the lawyer goes a long way to protect your rights for the entire duration of the lease.