Signing a commercial lease isn’t just about locking down a location for your business—it’s about locking yourself into a contract that may run for five or even ten years. And once you’re in, getting out isn’t always easy or cheap. Whether opening a shop, expanding your office, or leasing warehouse space, the lease agreement you sign can shape your business’s future.
Too often, tenants assume commercial leases are just more extended versions of residential ones. They’re not. In Illinois and Indiana, commercial leases aren’t subject to the same tenant protections you’d get in an apartment lease. That means if something isn’t written in the lease, you probably can’t count on it. Understanding what’s in front of you before signing can save you time, money, and stress later.
Rent Structure, Operating Costs, and Increases
It’s not just about the monthly rent but everything else that comes with it. Commercial leases often include terms like “triple net,” “gross lease,” or “modified gross lease.” These determine who pays for things like taxes, insurance, and maintenance. In a triple net lease (N), you’ll pay rent and a share of the building’s operating expenses. That low rent number may not be so low once those extras are added.
Also, pay close attention to how and when your rent can increase. Some leases include annual increases, while others tie rent hikes to inflation or market rates. Ensure you understand what triggers a change and how much notice the landlord must give you. This is especially important for long-term leases, where increases can really add up over time.
Use Clause, Repairs, and Exit Options
A “use clause” defines what kind of business you can run in the space. It might sound minor, but it can limit your flexibility. If you shift your business model later (say, from retail to coffee shop), you may need to renegotiate or even vacate. Check whether the lease prevents you from subleasing or sharing the space with a partner.
Maintenance and repairs are also a big deal in commercial leases. Unless the lease says otherwise, you might be responsible for everything inside the unit—even structural issues. In Illinois and Indiana, commercial tenants often have fewer protections than residential ones. If your HVAC breaks, you could be on the hook. Look closely at who is responsible for what and ensure those terms are clear.
Finally, don’t overlook the exit. Commercial leases often include personal guarantees, meaning you’re on the hook even if your business shuts down. If you want to leave early, you’ll need to know what your options are and what the penalties could be.
Do you want a Lease That Works for You?
A commercial lease is one of those documents you don’t want to gloss over. Suppose you’re starting or growing a business in Illinois or Indiana. In that case, Auricchio Law Offices can help you review your lease and ensure it’s written with your goals in mind. Before you sign anything, let’s talk.
Auricchio Law Offices
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