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How do residential and commercial leases differ?

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At its core, any sort of property lease has the same basic principle: buying the use of the property for a temporary amount of time, however long or short that time might be. However, commercial and residential leases have plenty of differences that set them apart from one another.

Commercial leasing involves rights and responsibilities that do not concern residential leasing at all. They serve a more complicated and nuanced purpose, which means they are more complex contracts and leases, as well.

Why are there fewer protections?

InvestorJunkie looks into the differences between commercial and residential leases. The biggest difference lies in your legal protection. Commercial leases, especially in comparison to residential leases, offer much fewer protections to lessees than residential leases. This generally happens because states and lawmakers assume that that leasing property for commercial reasons already has more knowledge than those leasing residential property. Thus, they have the ability to recognize dangers and avoid them.

The difference in flexibility

Commercial leasing also has more varied uses compared to residential leasing. The terms have to hold greater flexibility to match this difference. Everything from the duration of the lease to the rights to commercial property differs between cases, with negotiations being a center point for the lessee.

This flexibility opens up the possibility for bargaining as well. A commercial landlord will likely even expect you to bargain on the terms and will come into an offer prepared for that possibility. You may get to alter things like the duration of the lease, cap on rent increases when these increases will happen and the amount for the security deposit. You may still want legal staff working on your side to help smooth out the process.