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Commercial Tenant Rights - 

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COMMERCIAL TENANTS DO NOT HAVE THE SAME RIGHTS AS RESIDENTIAL TENANTS

Residential tenants have many additional rights that are guaranteed to them by federal or local laws. Commercial tenants do not enjoy additional protections outside of the lease agreement. In New York, a commercial tenant’s rights only include the rights that the lease agreement affords them. If an obligation or a right is not made explicit in the commercial lease agreement, it is probably not legally enforceable. 

COMMERCIAL TENANTS DO NOT HAVE A WARRANTY OF HABITABILITY

Residential tenants in New York have a right to a safe, decent, and sanitary apartment. Conversely, commercial tenants do not have a warranty of habitability. In other words, commercial landlords are under no obligation to make their property safe. They are not required to repair broken fixtures or maintain common areas. Instead, commercial tenants agree to rent the property “as is.” However, when a lease agreement requires landlords to maintain the condition of the property, the landlords are legally required to do so. 

Commercial landlords are legally required to repair some damaged structural conditions. When conditions substantially impact the use of the premise, landlords must fix the condition. For example, if the hot water in the building does not work, or the electricity does not work, the landlord cannot collect payment for rent until he or she fixes the condition. 

THE DUTY TO MITIGATE AND RENT REGULATION 

When residential tenants leave a property, the landlord has a legal duty to try to mitigate the damages. In other words, the landlord must at least try to find a tenant for the leased property when the original tenant breaks his or her lease and leaves before it expires. Commercial landlords in New York do not have a duty to mitigate. When a commercial tenant vacates the property before the lease is over, the landlord has the legal right to demand payment from the commercial tenant until the lease is over. 

New York can control the rent of residential buildings. When a building is rent-controlled, the landlord must keep the rent the same or under a certain amount after a lease expires. New York does not control the rent prices of commercial properties. Once a commercial lease expires, the landlord can raise the rent as he or she sees fit. Commercial landlords are under no obligation to offer the tenant a lease renewal at the same rental price. 

NEGOTIATING AN ADVANTAGEOUS COMMERCIAL LEASE AGREEMENT IS ESSENTIAL

The lack of additional rights afforded to commercial tenants makes it vital that commercial tenants take time to review and negotiate their contracts before signing them. For example, many commercial leases allow a commercial landlord to terminate the lease if he or she decides to demolish, sell, or rehabilitate the building. Our skilled commercial litigation attorneys frequently review commercial lease agreements. When agreements contain provisions that are not advantageous for our clients, we negotiate with the commercial landlord on behalf of our clients. 

TIPS FOR DRAFTING AN EFFECTIVE COMMERCIAL LEASE AGREEMENT

Because commercial tenants do not have as many legal rights as residential tenants, drafting an effective lease agreement is incredibly important. Commercial lease agreements are often complicated and difficult to understand. Busy business people often read the agreement too quickly or unintentionally gloss over the important details. Doing so can result in many negative consequences, however. When commercial lease agreements fail to mention important issues, commercial litigation might be required to resolve the issue.

In order to avoid costly commercial litigation, it is essential to draft and negotiate well-written commercial lease agreements. Lease agreements should include the following provisions:

• A detailed and accurate description of the property the tenant will rent

• A diagram of the exact space the tenant will rent

• A list of any additional spaces that could be included, such as bathrooms and storage 

• The specific rent amount per month and the term of the lease

• The date on which the rent is due

• Whether or not the landlord requires a security deposit 

• The amount of the security deposit and requirements to get the deposit back

NEGOTIATING A RIGHT TO RENEW A COMMERCIAL LEASE

Tenants may want to request a right to renew the lease after it expires. Commercial tenants do not have any legal right to renew the lease. Instead, a right to renew the lease must be written in the agreement to be enforceable. Anticipating all of the possible complications that could arise in a landlord and tenant relationship is challenging. It is essential to speak with a skilled commercial lease litigation attorney before agreeing to sign a commercial lease agreement.