Commercial Renters Fight For Greater Protection

Commercial Renters Fight For Greater Protection

Lease Agreement In a commercial lease there is a lot more at stake than just rent money; the success or failure of the business can hinge on the lease. Renters who do not take the time to consider carefully the terms of their agreement may face hefty maintenance costs, discover themselves responsible for unexpected taxes, or even find their business without a home. Illinois protects commercial lessees in three areas of particular importance.

Habitability

To protect residential tenants from exploitation by landlords of dilapidated buildings, Illinois enacted an implied warranty standard. The statute required building owners to keep the space free of dangerous defects when selling or renting.

Commercial leases do not have the same protections. The courts ruled consistently that commercial renters and buyers can consult a business transaction lawyer to perform due diligence on a property before committing to a lease, and accept the condition of any building they rent. The rules do protect commercial renters from interference by the landlord through both possession of the property and the explicit covenant of quiet enjoyment.

Maintenance of Major Systems

Major systems in a commercial building include the roof, plumbing, HVAC and electrical systems. In general, tenants accept responsibility for the day-to-day repair of the building, while the landlord retains maintenance responsibility for the major systems and structure itself.

Provisions within the lease contract may shift the burden of maintenance onto the shoulders of renters. A real estate or business transaction lawyer is often needed to sift through the legal jargon in the agreement to point out the specific areas of maintenance for which each party in the lease is responsible.

Taxes

Around property tax season, new commercial lessees are shocked to find their landlords deliver property tax bills. Most lessees assume the taxes are included in the rental price of the property, but that is not always the case.

A standard commercial lease holds landlords responsible for property taxes, though lessees may have to pay taxes on any improvements they make to the property. Landlords can escape the tax obligation by including language in the lease that transfers responsibility to the tenant.

When a series of violations occur, a lessee may pursue a constructive eviction with the help of a business transaction lawyer, but commercial renters should contact a business transactions lawyer before signing any lease agreement. This ensures the landlord does not overly burden the lessee with maintenance and tax obligations.

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