Commercial premises lease agreement – everything you need to know

Good lease agreement for commercial premises
Piotr Kłodziński|
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A – like the arrangement of the premises. 

It may be the responsibility of the landlord or tenant. In other words, the owner can prepare the premises to the agreed standard (described in the contract or its annex). Or the premises may be handed over to the tenant in a developer's condition, for example, or left by the previous tenant. In practice, it is worth spending a lot of time on this part of the contract, because many conflicts related to the lease agreement arise already at the stage of furnishing the premises - before the real period of operation of the rented premises begins. That is, we describe in detail the condition of the premises desired on the day of handover, or the changes that we want to introduce ourselves - so as to avoid unnecessary misunderstandings already at the stage of concluding the contract.
If we decide that the tenant will be responsible for the renovation of the premises, it often turns out that the tenant is planning works that require a building permit or are noisy and "dirty", i.e. works that may disturb neighboring premises. Therefore, it is good to also agree on the date of completion of the work, the rules for obtaining permits (in this respect, the cooperation of the landlord is also necessary and the rules of liability, including liability for disruptions to the operation of other premises.  

 

Are we a landlord or a tenant? What unites us and what divides us? 

When concluding the contract, it sometimes seems that the interests of both parties to the contract are completely divergent - but in practice, i.e. during the term of the lease, these interests differ very little. The common interest of the Landlord and the Tenant is to conclude a legal, transparent and clear lease agreement for a commercial premises, which will provide them with the most conflict-free cooperation possible. A good contract is one that both parties treat as a permanent solution. It is also one that is easy for both parties to interpret and manage. What is important is not only whether the lawyer understands it, but also the people who will perform it on a daily basis - i.e. administrators, accountants, building managers, etc. - must be able to understand it without any problems and doubts, so the simpler and more transparent the language used is to prepare the the better. The hermetic nature of legal language is not a path to heaven but to hell. The contract must also be easily enforceable, a large number of written notices, confirmations, return written confirmations of receipt, notifications and other burdensome obligations - this is something that should be avoided. Why? Because experience shows that the more such requirements we include, the more violations of the contract there will be. Of course, usually the parties who want to cooperate harmoniously will not draw any consequences from this fact.
Similarly, with ambiguities - the parties often differ in the method of measuring the area of the commercial premises or determining who should pay some of the fees (taxes, utility fees, additional fees, administrative fees, costs of necessary renovations, etc.). The scope of liability for damages and possible repairs is also understood differently, and statutory provisions and case law are definitely unclear on this issue. Clear and precise determination of these elements of the contract is in the best common interest of both parties to the commercial premises lease agreement. 

J – What is the purpose of the premises? Where is it located and what will it be used for by the Tenant? Does the landlord agree to this?

We will include completely different provisions in the lease agreement when it is a lease agreement for a typical commercial property, such as a commercial premises in a shopping mall, completely different provisions in a restaurant located behind the wall, and still different provisions for commercial premises located in tenement houses, commercial pavilions or in detached buildings or halach. A real estate lease agreement for a car repair shop has completely different characteristics than a premises lease agreement for an exclusive jewelry store in a shopping mall.
Office premises have their own specificity and are associated with completely different requirements and risks. In practice, unfortunately, the market has not developed a single contract template for each type of real estate, and many of them are extremely unfriendly and non-transparent.

P stands for clearly formulated lease agreement commercial real estate.
Some of their users wrongly believe in the magical power of inaccessible language and complicated phrases. We try to explain them and, where possible, replace some formulations with those whose normative meaning is clear to both parties who naturally use the same language.
Of course, many Tenants also have their own very specific requirements, some of them are included in the form of international guidelines that should be implemented in all concluded contracts, and some are prepared in the form of checklists or even non-binding guidelines. More and more often, in our work, we come across the fact that Polish companies also decide to adopt a common policy for all their lease agreements - standardizing their content. We have completed several such orders with very promising results. Not only shopping centers set requirements, tenants also increasingly have their own policies. Standardization of requirements makes it much easier to conduct business operations and also helps reduce costs.

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A – like the arrangement of the premises. 

It may be the responsibility of the landlord or tenant. In other words, the owner can prepare the premises to the agreed standard (described in the contract or its annex). Or the premises may be handed over to the tenant in a developer's condition, for example, or left by the previous tenant. In practice, it is worth spending a lot of time on this part of the contract, because many conflicts related to the lease agreement arise already at the stage of furnishing the premises - before the real period of operation of the rented premises begins. That is, we describe in detail the condition of the premises desired on the day of handover, or the changes that we want to introduce ourselves - so as to avoid unnecessary misunderstandings already at the stage of concluding the contract.
If we decide that the tenant will be responsible for the renovation of the premises, it often turns out that the tenant is planning works that require a building permit or are noisy and "dirty", i.e. works that may disturb neighboring premises. Therefore, it is good to also agree on the date of completion of the work, the rules for obtaining permits (in this respect, the cooperation of the landlord is also necessary and the rules of liability, including liability for disruptions to the operation of other premises.  

 

Are we a landlord or a tenant? What unites us and what divides us? 

When concluding the contract, it sometimes seems that the interests of both parties to the contract are completely divergent - but in practice, i.e. during the term of the lease, these interests differ very little. The common interest of the Landlord and the Tenant is to conclude a legal, transparent and clear lease agreement for a commercial premises, which will provide them with the most conflict-free cooperation possible. A good contract is one that both parties treat as a permanent solution. It is also one that is easy for both parties to interpret and manage. What is important is not only whether the lawyer understands it, but also the people who will perform it on a daily basis - i.e. administrators, accountants, building managers, etc. - must be able to understand it without any problems and doubts, so the simpler and more transparent the language used is to prepare the the better. The hermetic nature of legal language is not a path to heaven but to hell. The contract must also be easily enforceable, a large number of written notices, confirmations, return written confirmations of receipt, notifications and other burdensome obligations - this is something that should be avoided. Why? Because experience shows that the more such requirements we include, the more violations of the contract there will be. Of course, usually the parties who want to cooperate harmoniously will not draw any consequences from this fact.
Similarly, with ambiguities - the parties often differ in the method of measuring the area of the commercial premises or determining who should pay some of the fees (taxes, utility fees, additional fees, administrative fees, costs of necessary renovations, etc.). The scope of liability for damages and possible repairs is also understood differently, and statutory provisions and case law are definitely unclear on this issue. Clear and precise determination of these elements of the contract is in the best common interest of both parties to the commercial premises lease agreement. 

J – What is the purpose of the premises? Where is it located and what will it be used for by the Tenant? Does the landlord agree to this?

We will include completely different provisions in the lease agreement when it is a lease agreement for a typical commercial property, such as a commercial premises in a shopping mall, completely different provisions in a restaurant located behind the wall, and still different provisions for commercial premises located in tenement houses, commercial pavilions or in detached buildings or halach. A real estate lease agreement for a car repair shop has completely different characteristics than a premises lease agreement for an exclusive jewelry store in a shopping mall.
Office premises have their own specificity and are associated with completely different requirements and risks. In practice, unfortunately, the market has not developed a single contract template for each type of real estate, and many of them are extremely unfriendly and non-transparent.

P stands for clearly formulated lease agreement commercial real estate.
Some of their users wrongly believe in the magical power of inaccessible language and complicated phrases. We try to explain them and, where possible, replace some formulations with those whose normative meaning is clear to both parties who naturally use the same language.
Of course, many Tenants also have their own very specific requirements, some of them are included in the form of international guidelines that should be implemented in all concluded contracts, and some are prepared in the form of checklists or even non-binding guidelines. More and more often, in our work, we come across the fact that Polish companies also decide to adopt a common policy for all their lease agreements - standardizing their content. We have completed several such orders with very promising results. Not only shopping centers set requirements, tenants also increasingly have their own policies. Standardization of requirements makes it much easier to conduct business operations and also helps reduce costs.

Cdn.

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