The lease agreement is the governing document of the relationship between the owner of the property and the tenant. There are risks involved for both landlords and tenants when entering a leasing arrangement. Often, the rent payment is the largest expense incurred in a business. Therefore, it is prudent to obtain counsel of experienced attorneys to ensure the terms of the agreement are clear and comprehensive.
In general, a lease agreement must state the term of the occupancy, the amount of rent expected, the amount of the security deposit, rules regarding whether pets are allowed and whether the lease may be assigned, and property sublet. Due to the nature of this relationship, the Pennsylvania legal system regulates some aspects of rental agreements. According to state laws, the following terms ensure protections for both parties.
Security Deposits. A security deposit is the amount of money the tenant is required to pay to the owner to cover unpaid rent, damages to the property, costs of repairs and cleaning charges once the lease ends. However, according to Pennsylvania’s laws, the security deposit may not be more than two months’ rent for the first year and it must be returned within 30 days after the lease ends. The deposit also incurs interest if it is held for more than two years.
Overdue Rent. Landlords are required to provide a grace period of 10 days for payment of overdue rent. However, after the 10 days have expired, if no payment has been made, the landlord can evict the tenant.
Repairs. Landlords are required to make repairs for things that affect the tenant’s habitability of the property, such as plumbing, heating, and roof and window leaks. If the landlord fails to repair issues within a reasonable time, the tenant can lawfully withhold the rent.
Fair Leasing Practices. Landlords are liable for discrimination based on race, age, religion, color, sex, national origin, handicap, disability, family status, and ancestry.
A commercial lease is more complicated than a residential lease. Most residential leases are standard agreements that require little negotiation. However, commercial leases are negotiable and hold fewer standard agreements to work from. There are also less state law protections for commercial lease agreements. Commercial tenants should work carefully to define the relationships with the owner to ensure that each is aware of their responsibilities. The following terms are unique to commercial leases:
Improvements. Lease agreement should address whether the tenant can make improvements and modifications to the property and whether tenant must return the unit in its original condition when the lease ends.
Description of Property. Lease should clearly state whether the bathrooms, hallways, and parking are included in the rent payment.
Exclusivity. An exclusivity clause may be important in a commercial lease to prevent the landlord from renting another space in the lot to a competitor.
Signage. Considers whether the agreement prevents the use of signage.
Americans with Disabilities Act. A business that is open to the public and has over 15 employees is subject to the American with Disabilities Act, which requires that the premises be accessible to the disabled. A lease agreement should determine the party responsible for compliance with the law.
When considering leasing a commercial property, rely on the trusted and experienced small business lawyers at MacMain Leinhauser. Our attorneys will listen carefully to your needs and negotiate a lease agreement that protects your business interests. For an initial consultation, call us at 484-318-7106 or contact us online. Located in West Chester, Pennsylvania, we serve clients throughout Chester County and Philadelphia.