You may have heard of both a residential lease or a commercial lease. But if you’ve signed a residential lease in the past, don’t assume a commercial lease will be the same. There are various differences that are important to note before entering into any type of agreement. Learn more about residential leases, commercial leases, and the main differences between them.

Residential Leases

Residential leases are for buildings you plan to reside in, like a house or apartment. Standard leases tend to last 12 months. After that time is up, the resident can sometimes be offered an option to extend the contract on a month-by-month basis. Those who have signed a residential lease are not typically responsible for minor repairs or routine maintenance of the building, as the landlord is in charge of these issues.

It’s also important to note that those who enter into a residential lease often have more legal protections. This is because all people need a place to live, and the average person might not have the legal savvy to detect if they are being taken advantage of by a landlord.

Commercial Leases   

Commercial leases are intended for businesses that want to rent property as workspace. The initial contract lasts anywhere from three to five years. Unlike residential leases, tenants have much more responsibilities when it comes to maintenance. The landlord is still responsible for the general upkeep of the property, but the tenant is responsible for everything else with specific obligations being outlined in the lease.

Tenants that sign a commercial lease don’t have as many legal protections in place as one that signs a residential lease. For instance, consumer protection laws don’t often apply to commercial leases. It’s also not as easy to back out of as a commercial lease, as larger sums of money and more legalities are involved.

This is due to the assumption that a tenant entering a commercial lease will have more knowledge on legal matters or access to a company’s legal counsel. Because of this, negotiations are more likely to take place until an agreement is determined to be fair by both the tenant and the landlord.

Looking to rent or sell a commercial property? Check out APPRO Development, Inc., & CERRON Commercial Properties in Lakeville, MN. As one of the top ten developers in the Twin City, they can help you with anything from designing and building to buying and leasing a property. No matter your real estate goals, the experienced employees at APPRO and CERRON are prepared to walk you through the entire process. For more information, visit them online or call (952) 469-2171.