The content of your Rent agreement or Lease agreement can be a liability to your business

How?

Renting or leasing a space or office is a major milestone for every business, yet many business owners rent office space, sign the lease agreement without getting a Lawyer to analyse the agreement and inform them of the liability the rent agreement will cost their business in future.

As a Business, your rent agreement must be in such a way that will favour your current business and possible future expansion, but certain clauses and covenants in a rent agreement can be a liability to your business growth and profit.

Below are some of the possible Rent clauses that will cause you liability:

1. Rates and charges:
Tenement rates,taxes and charges on the building, Electricity Bills that are in arrears before you rented the space, non recurrent expenses ( e.g electricity poll levy, transformer levy e.t.c) all these may be stipulated to be paid by the tenants. Once you sign,then you agree to pay and it becomes a liability to your business.

2. Restrictive Use Clause:
In most rent agreements there are clauses that can restrict your business from making any structural changes that might suit the specificity of your business.

This clause limits how you may use the space. Ideally, you would want to avoid severe restrictions on how you may use the commercial space. It is wise to broaden the use clause in way that will be much more favorable to your business than a restrictive one.

3. Re-Entry Clause:
Most Tenant agreement contains a Re-Entry clause. Which gives the landlord the right of forfeiture if the tenant breaches any term in the agreement. This can work against against your business. Instead, include a clause affording the tenant the opportunity to remedy any breach that may occur.

4. Rent Abatement clause:
This is a very important clause. Where the property is damaged (e.g where the roof is blown off by wind, or the wall falls of, or the property because naturally un-usable) there should be a clause that exempts your rent from counting within the duration in which the property is being re-installed.

Your rent should freeze until the property has been re-installed, and after the property has been fixed, your rent should now start counting.

Opatola Victor Esq
adeopatola@gmail.com
09041815408

Lawyer Kudos for good write-up.

utepu:
Lawyer Kudos for good write-up.

Thank you.