GSB-44: How to Read, Understand and Indentify Potential Issues in a Commercial Lease Agreement

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Did you know that a commercial lease can have a clause where the landlord can get you out of business in just 30 days? How about the other clause where they can walk-in to your premises even when you are closed and no one is at your location? Well this is true, they can, stay tuned and I will tell you how to find out if your landlord put those clauses in your lease..

Welcome to gas station business 101 podcast. This is episode number 44. This is the only show of its kind where we focus on all aspects of gas station business and we discuss, analyze and try to improve the process by trying to see what works and what doesn’t.

Today’s topic a very important one and it is all about commercial lease and how to read and understand this complex document. What to look for as potential problem in these leases.

The idea for this episode came from two people, Yash and Jasmine, so thanks to both of you for bringing up such a good topic out front for everyone else.

Most commercial leases are complex by nature as it is a legal document but it gets even more complex when it is prepared for a gas station because there are two parts of a gas station business, a convenience store part and then there is the fuel part.

To understand this document fully I am attaching a full commercial lease as a sample which you should be able to download from my blog site, by going to the show notes for this episode or you can go under the resource tab and find it there.

In this episode I will not read every word of a lease because that would not only take a long time to do but it will be not worth your time as you can just download that copy and read it yourself. Instead what I will do is explain few important points of a commercial lease and some potential issues that maybe be hidden in a commercial lease.

 

Here is the link to the commercial lease sample you can look at

Commercial Lease

So let’s get started..

These are the followings 18 important parts of a commercial lease agreement

1. Identify each party
2. What is for lease
3. Term of the lease
4. Rent
5. Additional rent (taxes, fuel rent)
6. Payment methods and due dates
7. Insurance
8. Indemnity
9. Assignment(Sublease)
10. Maintenance
11. Casualty
12. Right to Entry
13. Default
14. Remedies
15. Personal guaranty
16. Brand identification and minimum Standard
17. Additional Exhibits or attachments
18. Potential risk factors to look for

Couple of quick announcements before we finish here..

I am still seeing people registering for my forum on my site, as I mentioned before, that forum is not working properly, so please join my Facebook group instead and there you can post questions, get quick answer to any question you may have. To join my Facebook group simply go to shabbirhossain.net and it will take you straight to my group.

If you would like for me cover a topic I haven’t yet, feel free to email me or post it on Facebook group and I will try my best to have an episode on that topic, but remember if I pick your topic I will dedicate that episode to your name.

Lastly I want to send a big thanks to Nitin Gangwani, for his kind words as he gave me a 5 star review on iTunes, Nitin if you are listening I sure do appreciate your kind words and that sure makes my day.

Don’t forget to sign up for my newsletter, you can sign up for it by going to gasstationbusiness101.com/subscribe or you can directly go to my site and at the bottom of every page there is a subscribe button.

Next week I will have another very important episode where we will discuss everything about FSA or Fuel Supply Agreement and that episode will be dedicated to a long time listener name Yash as he is the one who gave me that topic.

Cheers!