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i have question about our business lease agreement.
what does following clause means?
1.TERM: the term of this lease shall be for 5years w/optional 5 years at the end of the lease commencing the 1st day of september,2014 and shall be terminate on the 30th day of august 2019.
does this mean we tenant have right to extend the lease 5 more years after 2019?
2. SUBORDINATION:lessee agrees that this lease shall be subordinate to a mortgages or deed of trust, place on the property described in exhibit a, provided that in the event or foreclosures if lessee is not then in default and agrees to attorn to the mortgagee or beneficiary under deed of trust, such mortgagee or beneficiary shall recognize lessee's right of possession for the term of the lease.
does this mean when somebody else buys the building and change ownership, would that somebody able to terminate the lease if he wants to? or do we have right to stay during original lease term.
i have question about our business lease agreement.
what does following clause means?
1.TERM: the term of this lease shall be for 5years w/optional 5 years at the end of the lease commencing the 1st day of september,2014 and shall be terminate on the 30th day of august 2019.
does this mean we tenant have right to extend the lease 5 more years after 2019?
2. SUBORDINATION:lessee agrees that this lease shall be subordinate to a mortgages or deed of trust, place on the property described in exhibit a, provided that in the event or foreclosures if lessee is not then in default and agrees to attorn to the mortgagee or beneficiary under deed of trust, such mortgagee or beneficiary shall recognize lessee's right of possession for the term of the lease.
does this mean when somebody else buys the building and change ownership, would that somebody able to terminate the lease if he wants to? or do we have right to stay during original lease term.
1) This is the right for another 5 years that should be described in another section. The missing parts to that option are the notice requirements and rent amount for the next 5 years.
2) This is specifically talking about foreclosure and nothing to do with sale of the property. When a property is sold with a lease in place the new owner is still bound by the lease.
It's pretty standard for business leases to run for 5 years. At the end of five years, the lease can be renewed, but there will usually be an increase in rent. It's so you don't have to move your established business but the landlord doesn't have to keep you forever at th original rental amount.
I'm going to add, maybe you should go over that lease with your lawyer. A business lease is not like a residential lease. If there is a problem, a judge is going to assume that anyone signing a business lease knows what they are dong, so there is no legal protection for idiocy, like there is for residential tenants. You are expected to know and understand.
Also, the landlord has some strong rights concerning eviction and about seizing your assets if you don't pay rent. It's nothing like not paying your rent on an apartment.
Know what you are signing, what the terms are, and what your rights are.
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