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Congratulations! You’ve found what looks like the perfect place to open your small business or nonprofit. But be careful—what you don’t know could turn your dream location into a nightmare. Commercial leases are very different from apartment or house leases. In Florida, they offer fewer protections and often include complicated provisions. The fine print can create problems if you don’t understand it.
Understand Your Lease Before You Sign
First, make sure you are allowed to run your business in that location. Zoning rules, sign rules, and limits on how a property can be used can be confusing. You might sign a lease for a space that does not allow your type of business or limits important parts of how you operate. Just because another business was there before does not mean it was allowed. Before signing, check with the city, and sometimes Miami-Dade County, depending on your business, to be sure your business can legally operate there.
Next, consider who is responsible for repairs and upkeep. Unlike residential landlords, Florida law does not require commercial landlords to make repairs unless the lease clearly states so. If your lease does not say the landlord must fix certain things, you may have to pay for expensive repairs yourself. This is why it’s important to read the lease carefully or have a lawyer help negotiate these terms.
Many commercial leases are called “triple net” leases. This means the tenant pays most of the property’s costs, including taxes, insurance, and maintenance, on top of the rent. These extra costs can add up fast, so be sure you understand the total amount you may have to pay.
Ending a commercial lease early can also be difficult. Commercial leases often last three to five years and may charge significant penalties if you leave early. If your business needs to move or cut costs, these provisions could cause serious financial trouble.
Finally, think about personal liability. Even if your business is a corporation or LLC, most commercial landlords require a personal guarantee. This means if your business can’t pay the rent, the landlord may go after you personally, and your credit could be affected.
How Legal Services Can Help
A commercial lease is one of the biggest financial decisions a business owner will make. If you need help understanding or negotiating a lease, the Community Economic Development Unit at Legal Services of Greater Miami, Inc. can help at no cost. We represent qualified small businesses owned by low- to moderate-income individuals and nonprofits that serve low-income communities. Our legal services include commercial leases, business formation, licensing, contract drafting and other non-litigation matters.
Small business owners and nonprofit leaders can apply online at www.legalservicesmiami.org or www.flcommunitydevelopment.org. There is no cost, and staff will review eligibility during the application process. We also have a number of small business and nonprofit guides on the www.flcommunitydevelopment.org website, including one on commercial leasing. Let us help you protect your business or nonprofit and plan for a strong future.
