It is tough entering the commercial rentals market for the first time. Firstly, you will have to find a property that’s affordable, and secondly, you will need to understand the requirements and expectations. It’s also important to familiarise yourself with how rental amounts are attached to property size and type, if you want to budget properly. If you have been renting residential property for years and now want to rent a commercial space, you probably think that you know all that you need to know about renting. Except you really don’t! You might think that residential and commercial properties to let, follow similar lease terms and structures, but they don’t. There are significant differences between these two lease types.
A commercial property to let will come with a far more complicated lease agreement than your residential home will. For starters, a commercial lease can run from 3 to 20 years. Rent is annually reviewed just like a residential rental, except the annual increase is usually a bit less than the typical 15% of a residential agreement. You might have heard that being a residential property owner is hard work, especially since tenants seem to break leases with little to no consequences. It’s quite different with a commercial lease. Firstly, the terms make it fairly difficult to break a lease agreement in the commercial world, which means that tenants must be sure of their decision before going ahead. It’s also inconvenient and costly for a business to break a lease and have to move before the term is up, so it really works in the favour of both parties if the agreement is honoured.
In most commercial lease agreements, it is the company as an entity that leases the property, and not an individual in their personal capacity. Any legal proceedings that result from the agreement or problems along the way are taken up between the landlord and the business, not individual staff members.
Another thing to consider is maintenance. In many residential leases, it is the tenant’s responsibility to maintain the property’s interior and exterior appearance. In most managed commercial property developments, this particular responsibility is usually that of the owner’s. This is especially the case if you are renting property in a development shared by other businesses.
This is really just the tip of the iceberg when it comes to the differences between commercial and residential rentals. We recommend that you chat to one of our professional consultants to learn more about how a commercial lease differs, so that you can fully understand the process and expectations along the way.
At Abland, we won’t just advise you on commercial leases. We will also assist you with finding a commercial property to let that suits your needs and requirements. We have a number of developments in Gauteng and Cape Town that are bound to meet with your expectations. For more information and advice on our properties and lease agreements, contact us via email or telephone at Abland today.