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In the state of Colorado, many businesses will join into a commercial lease with a landlord because they need their business to have a face. This is a very important thing to consider when you own a business, and the lease is going to be very similar to a residential rental agreement that you may have. This type of agreement is typically set for a longer term than others, and if the tenant has a low credit score, a guarantor may be required to get the rental agreement started.
Guarantees, Disclosures, and Additional Concerns
Any lease that is written up for commercial purposes needs to include all of the essential disclosures and guarantees that are included in the agreement. Both parties must read and make sure that the documents are fully understood before the agreement is signed.
Use of Premise
When an agreement of this type is written, the type of business that is going to be done on the property will need to be listed on the lease. This is to prevent the landlord from being liable for the tenant selling items that do not fall into the same category. Tenants will most likely want to keep a broader category on the lease so that they have more options without breaching the contract. The landlord will prefer a more narrow, restrictive category to make sure that sales stay within the zoning regulations of the county.
Rider for Food Use
Any tenant that has a business that serves food and drinks on the property will need to make sure that the laws of the state of Colorado are followed. Food is something that cannot be served in all locations because if the conditions are not sanitary, the customers can get sick. Also, any restaurant that serves alcohol will need to have a liquor license as well. If the tenant does not follow all of the food laws that pertain to this state, then they will find themselves in breach of the commercial rental agreement. This could cause the tenant to face eviction proceedings, which can be detrimental to any business.
Lead Paint Disclaimer
Any building that was built before the year 1978 has the chance that lead paint was used in its construction. This is a dangerous situation that could be harmful to children as well as pregnant mothers to be. If this is an issue on the property, the tenant will need to know about it before making a decision as to whether it is a worthwhile investment.
Improvements to the Premise
If there are any changes that need to be done on the property, they need to be listed here in this section. The landlord will also need to explain the process that needs to take place when repairs and improvements need to happen on the premise. In some rental agreements, the tenant will need to have permission from the landlord to make any changes to the property. However, some landlords will allow the changes to be done and before any rent is being taken for the rental agreement. This is called a build-out period, and it will enable the tenant to build up the property to fit their needs. These costs are paid for by the tenant.
Writing a Colorado Commercial Lease Agreement
When the agreement is being written up, the first thing that should appear is the names of the individuals who are going to be signing the agreement. The full name of both parties should be listed here as well as a good phone number where both parties can be reached.
Terms of the Lease
This is a section of the lease agreement that will explain the dates of the lease as well as the amount that is to be paid each month. The rent amount should be listed in an annual amount as well as broken down into how much is due each month. Also, make sure to include information regarding the security deposit as well as the hours that the business will be operating so that the landlord does not disturb the tenant when they are in the middle of a sale or a meeting. The renewal process should always be stated in the agreement because, even though these leases can be set for five to 10 years, once the unit is up for renewal, it is likely that the rent that is charged will increase as well.
Utilities and Additional Expenses
The landlord will be responsible for covering the property taxes for the building as well as any insurance that they have purchased, but the tenant will be responsible for paying for the utilities that they use. This will include gas, electric, sewage, phone, internet, and water.
When a tenant has a business in a building, they are going to need to have a place for the employees and the customers to park. This may not need to be a large space, but if there are other businesses in the same building, their parking spaces cannot be taken up either, so ideally, the landlord will set aside a certain amount of spaces for the tenant to use. If more space is needed, there will often be a parking lot or street parking that can be used.
Signature and Date
The terms of the lease must be read and agreed upon by the landlord and the new tenant. Both of the parties will be required to print their full, legal name as well as sign it on the designated location. The date that the agreement is signed must also go beside the name of each individual. If a guarantor is required for the commercial rental agreement, then their information will also need to go on the form. This will most likely only include their name, their address, and their social security number. Their signature and the date will also need to be included.