Tips to help you negotiate your commercial lease

A commercial lease includes several clauses that define the terms of renting a space. Among the most important are:

Term of the Lease: The minimum term of a commercial lease is five years in Quebec. It’s possible to negotiate shorter leases, but it’s important to fully understand the implications before committing.

Rent: Rent is the amount the tenant pays the landlord for using the space. It can be a fixed amount or indexed to an index such as the cost of living. The lease should also specify the dates and terms of rent payments.

Additional Charges: In addition to rent, tenants may have to pay charges like municipal taxes, maintenance fees, and building insurance. The type of charges and their distribution between the tenant and the landlord must be clearly defined in the lease.

Repairs and Maintenance: The lease should specify who is responsible for maintenance and repair work in the space. It’s important to carefully read this clause to understand the tenant’s obligations.

Assignment and Subletting: The lease may include restrictions on assigning or subletting the space to a third party. It’s important to know these restrictions before signing the lease.

Termination of the Lease: The lease should outline the conditions under which either party can terminate the lease. It’s important to understand these conditions to know how you can end the lease if necessary.

Some of the points listed above may depend on the terms of your lease. According to the Educaloi organization, commercial leases are often classified based on the financial responsibilities of the landlord and tenant. Here are two common classifications:

• Gross Lease: This type of lease means that the tenant pays only the agreed rent. All expenses related to the maintenance and operation of the building are the responsibility of the landlord, or they are included in the rent amount.
• Net Lease, Double Net Lease, Triple Net Lease: Educaloi specifies that these terms are not officially defined and may vary from one lease to another. Generally, terminology indicating more ‘net’ implies that the tenant bears additional expenses.

A commercial lease in French

It should also be noted that since June 1st of last year, the Law on the Official and Common Language of Quebec, French, stipulates that when signing an adhesion contract, such as a commercial lease, the landlord is required to provide you with a French version of the contract. Moreover, they cannot require you to pay for the translation of the lease or its annexes, if applicable.

Permits and Zoning

Municipal rules and regulations regarding the commercial use of real estate must be respected. In Montreal, as well as in many other municipalities, an occupancy permit is required to open a business. It is crucial not to sign a lease without ensuring it includes a clause conditional upon obtaining the required permit. Additionally, you must ensure that your activities comply with the zoning regulations of the area where your space is located.