As a prospective commercial tenant, you may be tempted to sign on the dotted line of a preprinted form lease agreement in order to secure a new business location quickly and easily. However, this decision could end up being a costly mistake in the long run.
Preprinted forms are designed to be one-size-fits-all solutions.Preprinted form leases can contain problematic provisions that put you at a disadvantage and leave you vulnerable to legal disputes down the line. They may contain clauses that are irrelevant or even detrimental to your particular situation, and omit key provisions that are critical to protecting your interests. When you use a preprinted form lease agreement, you’re putting yourself at the mercy of the landlord. You’re giving up your right to negotiate and customize your lease to fit your needs. And that’s a dangerous position to be in. So, what should you do instead? Simple: hire a real estate lawyer. A good lawyer can help you negotiate and customize your lease to fit your unique situation. In this article, we’ll explore some of the dangers of using preprinted form leases and provide examples of problematic lease provisions. 1. Vague or Ambiguous Terms One of the most common problems with preprinted form leases is the use of vague or ambiguous terms that can be interpreted in different ways by the parties involved. This can lead to disputes over the meaning of the lease agreement and who is responsible for certain obligations. For example, a preprinted form lease might include a clause that requires the tenant to “maintain the premises in good condition.” However, it’s not clear what “good condition” means in this context. Does it mean the tenant is responsible for repairing any wear and tear on the property, or just for keeping the property clean and tidy? Without a clear definition, this clause could be interpreted in different ways by the landlord and tenant. 2. One-Sided Provisions Preprinted form leases are often drafted by landlords or their attorneys, which means they may contain provisions that favor the landlord over the tenant. These one-sided provisions can leave tenants with little room to negotiate and can put them at a disadvantage if a dispute arises. For example, a preprinted form lease might include a clause that requires the tenant to pay for all repairs and maintenance of the property, even if the repairs are the landlord’s responsibility under the law. This puts the burden of maintaining the property entirely on the tenant, which can be costly and unfair. 3. Inadequate Notice Requirements Preprinted form leases may also include inadequate notice requirements, which can lead to confusion and legal disputes. For example, a preprinted form lease might require the tenant to provide notice of their intention to renew the lease six months before the lease expires. If the tenant fails to provide notice within that timeframe, the lease may automatically expire, leaving the tenant without a place to conduct their business. 4. Limitations on Use Another common problem with preprinted form leases is the inclusion of limitations on the tenant’s use of the property. For example, a preprinted form lease might prohibit the tenant from using the property for any purpose other than the operation of their business. This can be problematic if the tenant wants to expand their business or use the property for another purpose. Here is an example, let’s say you’re a restaurant owner leasing a space in a busy shopping center. The preprinted lease agreement you sign may include a clause that prohibits you from using outdoor seating. But what if outdoor seating is crucial to your business? What if it’s the reason customers choose your restaurant over others in the area? By signing a preprinted form lease agreement, you’re giving up your right to negotiate that clause. Here is another example, let’s say you’re a tenant in a retail space and the preprinted form lease agreement you’re given doesn’t include a provision for exclusive use of the parking lot. This could lead to headaches down the road if other businesses in the building are allowed to park there and take up valuable spaces that your customers need. 5. Automatic Renewal Clauses Finally, preprinted form leases may include automatic renewal clauses, which can be difficult to terminate if the tenant no longer wants to lease the property. For example, a preprinted form lease might include a clause that automatically renews the lease for another year unless the tenant provides written notice of their intention not to renew the lease within a certain timeframe. If the tenant forgets to provide notice, they may be locked into another year of leasing the property. 6. HVAC Warranty In addition to the problematic lease provisions mentioned above, commercial tenants should be particularly cautious of lease agreements that include unfair provisions regarding the HVAC system and a landlord warranty period at the beginning of the lease that is too short. HVAC systems are crucial for maintaining a comfortable and safe environment for businesses and their customers, and repairing or replacing these systems can be expensive. Some preprinted form leases may require the tenant to maintain, repair and even replace the HVAC system irrespective of the cost and the amount of time remaining in the lease. Conclusion While preprinted form leases may seem like a convenient option for prospective commercial tenants, they can actually be quite dangerous. These leases often contain problematic provisions that can leave tenants vulnerable to legal disputes and financial losses. Before signing any lease agreement, it’s important to carefully review the terms and negotiate any provisions that are not in your best interests. An experienced attorney can help you navigate the complex world of commercial leases and ensure that your interests are protected.