A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.
The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.
Because the law does not provide a commercial tenant with as many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.
The law governing commercial leases varies from state to state but generally consists of a state's contract law (as applied to the lease agreement)—and in some states, includes the statutes enacted by the state's legislature that specifically apply to commercial tenancies, or that generally apply to both residential and commercial tenancies.
In Texas, a commercial lease agreement is a binding contract between a landlord and a business tenant for the rental of nonresidential property, such as office space, warehouses, or retail locations. Unlike residential tenants, commercial tenants are considered more knowledgeable and are expected to understand and negotiate the terms of their leases. Texas law does not provide the same level of statutory protections to commercial tenants as it does to residential tenants. Therefore, it is crucial for a business entering into a commercial lease to carefully review and negotiate the terms to safeguard its interests. The terms of a commercial lease can significantly affect a business's operations and financial health. The regulation of commercial leases in Texas is primarily governed by state contract law, and while there may be some statutes that specifically address commercial tenancies, the protections are not as extensive as those for residential leases. It is often advisable for a business to consult with an attorney to ensure that the lease terms are fair and to understand the implications of the lease agreement before signing.
