Law

What you need to know about commercial eviction

Most people don’t know all about rent laws. This is understandable since not everyone is renting their properties and most people that are paying a rent simply don’t need to know the laws on the books. They don’t need to because they abide by the rules of their tenant and no problems arise in those cases.

But what about the times when a commercial tenant does not abide by the rules? What about landlords that do not abide by the law themselves. This would both very bad scenarios, but we need to address them to understand how things should be according to the law.

In this article, we will explore some of the basics regarding commercial rent leases and what to do if a commercial eviction is needed.

The lease agreement

In most commercial tenancies there is usually a commercial lease agreement. This is the signed document that must be signed by both the landlord or proprietor and the person who wants to rent the business property. Often, the lease agreements set for a very limited amount of time. This is especially common in places where the rent offer is very abundant, and tenants tend not to last very long on properties. Otherwise, lease agreements are known to be set for periods such as trimesters, semesters or a year.

When this period of time ends without any disagreement or fault by any of the parties involved, the most common thing is that the landlord issues a new lease agreement, however, may draw an addendum to the current agreement. This can be an opportunity for the landlord to make amends on the lease agreement or to include other rules that were not addressed the first time.

If the landlord wishes to make one or more amendments, and the tenant agrees with any of these and sign the new version of the lease agreement. Otherwise, the landlord should wait for the current lease to expire and present the tenant a new one.

Types of lease agreementsĀ 

First of all, we need to establish the main differences between commercial lease agreements and residential lease agreements. In both cases, we would have a “lessee” and a “lessor.” The lessee in the person who has to abide by the rules established in the lease agreement. On the other hand, the lessor is usually the owner or landlord of the property or the person that was authorized by the owner to set these rules, that person is often referred to as the owner’s agent.

Now, by definition, a residential lease agreement is the one that needs to identify the property as such and then be more specific about its nature. In a residential lease agreement, the property can be defined as an apartment, a house, a condo or a townhouse. The important thing is that said type of property cannot be used with commercial purposes. The intended purpose is also only permitted to the people included in the lease agreement. Otherwise, the tenant would be violating basic lease principles.

On the other hand, a commercial lease agreement is typically based on rent by square meters. It is understandable that this is the typical rent style since the space required for a business is often related to its purpose and income.

Small business will typically need less space and therefore rent less space. The owner can then rent the rest of the space to other small business. As with the residential type of rental, a commercial property cannot be used as a residence and sometimes a separate lease is signed if there is also a residential property on the premises to be rented to the same tenant.

When do commercial evictions occur

It is important to highlight that both tenants and landlords should avoid an eviction. Their reputation can be damaged, whoever the source of the problem is. They can also be expensive to the landlord.

We know that most evictions start because of the tenant failing to pay the rent, and there can be various reasons for this, such as the tenant’s business being in financial difficulties, the tenant withholding the rent due to the landlord’s failed commitment to do repairs or the tenant filing for bankruptcy.

An eviction can also happen if the tenant inexplicably leaves the premises without turning over possession of the property to the landlord, usually by turning in the keys.