Commercial leases are legally valid contracts between the landlord and the tenant that contain various provisions governing the business relationship. Although some commercial landlord-tenant relationships proceed for years without incident, others encounter commercial lease disputes. An Arizona real estate lawyer can advise you of your rights and responsibilities under a commercial lease and help you resolve lease disputes as they arise through negotiations, alternative dispute resolution, or litigation as needed.
Although various disputes can develop concerning commercial leases, some occur more frequently than others. Here are some of the most common types of commercial lease disputes that you can expect.
Commercial leases detail how much a tenant must pay the landlord each month to rent a commercial space and the timeframe for paying that rent. If a tenant fails to pay the rent as it becomes due, the landlord has legal remedies that it can take against the tenant, up to and including evictions and lockouts. Other rent-related commercial lease disputes may include rent negotiations during lease renewal periods. Disputes concerning rent are some of the most frequently seen commercial lease disputes.
Early Lease Terminations
Certain events or circumstances may compel the landlord or tenant to end a lease prematurely. For instance, a tenant may close their business due to financial problems. A landlord may decide to retire and sell the commercial space. Whatever the situation, commercial leases usually contain provisions about what occurs in the event of early termination. They may include “break clauses,” which allow a tenant to prematurely terminate the lease in some cases without owing the balance due on the lease. However, in many cases, the tenant may be penalized for terminating the lease early, such as being forced to pay the balance of the rent remaining due and owing under the lease.
In some cases, a party’s nonperformance may lead to lease termination. For instance, a tenant may seek to break a lease early if the landlord fails to repair a substantial defect in the common area or provide improvements as promised. In that case, the landlord might seek damages from the tenant for breaking the lease prematurely, but the tenant also might seek damages for the landlord’s nonperformance of their duties under the lease.
Covenant of Quiet Enjoyment
A commercial property owner who rents a space to a tenant must avoid any undue interference with the tenant or its business, whether or not the commercial lease explicitly contains this provision. Under Arizona law, this duty is known as the covenant of quiet enjoyment, which covers various issues and often results in commercial lease disputes. For instance, the property owner must allow the tenant full access to and use the property as promised in the lease agreement.
Property owners also must refrain from unduly disrupting or interfering with the leased property, meaning that they cannot disturb the tenant by repeatedly entering the property or otherwise creating a situation that makes it impossible for the tenant to continue their business. Every case is different, so what exactly constitutes quiet enjoyment in one landlord-tenant relationship may be significantly different in another relationship.
Repair and Maintenance Costs
Commercial leases often make tenants solely responsible for maintenance and repair costs and any improvements they wish to make to the space. On the other hand, property owners are typically responsible for maintaining common areas of a commercial building to eliminate dangerous conditions. If these respective duties are not specifically defined in the lease agreement, the tenant could be financially responsible for extensive maintenance and repair costs to major property systems, such as HVAC system replacement. When needed, repairs will cost thousands of dollars, and if the repair duties in the lease are unclear, commercial lease disputes can easily arise.
We Are Here to Help You with Your Legal Needs
We will ensure that you understand all the provisions in your commercial lease upfront concerning your rights and responsibilities and those of the other party. If commercial lease disputes arise regarding your real estate matter, you will have our assistance to reach the most effective and efficient resolution possible. Contact the offices of Provident Law today at (480) 388-3343 or online and schedule an appointment to speak with our Arizona real estate attorneys about your legal matter.