The Basics of Commercial Leases in Pennsylvania

Signing a commercial lease is a significant commitment for both landlords and tenants. Unlike residential leases, commercial leases involve more complex negotiations, fewer statutory protections, and greater flexibility in structuring terms. Whether you are renting an office space, storefront, or industrial facility, understanding your rights and responsibilities under Pennsylvania law is essential.

This guide covers the fundamentals of commercial leases in Pennsylvania, including key terms, negotiation strategies, and legal considerations to help you make informed decisions.

Key Components of a Commercial Lease

A well-drafted commercial lease agreement outlines the rights and responsibilities of both parties. Here are some of the most important terms to understand:

1. Lease Term

• Specifies the duration of the lease (e.g., 3 years, 5 years, or longer).

• May include options for renewal or early termination.

2. Rent and Additional Costs

• Base rent amount and payment schedule.

• Additional expenses such as property taxes, utilities, insurance, and maintenance fees.

• Common Area Maintenance (CAM) fees, if applicable.

3. Type of Lease Structure

• Gross Lease – Tenant pays a fixed rent, and the landlord covers operating expenses.

• Net Lease – Tenant is responsible for rent plus additional expenses (e.g., property taxes, insurance, maintenance).

• Percentage Lease – Tenant pays base rent plus a percentage of revenue (common in retail leases).

4. Use and Zoning Restrictions

• Defines how the property may be used (e.g., retail, office, industrial).

• Ensures compliance with local zoning laws and business regulations.

5. Maintenance and Repairs

• Specifies which party is responsible for repairs and upkeep.

• Addresses routine maintenance, structural repairs, and liability for damages.

6. Security Deposit

• Amount required as security for lease obligations.

• Conditions under which the deposit is returned or forfeited.

7. Assignment and Subleasing

• Determines whether the tenant can assign the lease or sublease the space.

• May require landlord approval and additional terms.

8. Default and Termination

• Outlines conditions for lease termination, including nonpayment of rent or breach of contract.

• Specifies notice periods and penalties for early termination.

Tenant Rights and Responsibilities in Pennsylvania

Commercial tenants in Pennsylvania should be aware of their legal rights and obligations under state law:

✔ Right to Quiet Enjoyment – Tenants have the right to use the premises without interference from the landlord, as long as they comply with lease terms.

✔ Right to Fair Treatment – Landlords cannot impose unreasonable lease terms or engage in discriminatory practices.

✔ Obligation to Maintain the Premises – Tenants are typically responsible for maintaining the leased space according to the lease agreement.

✔ Compliance with Local Laws – Tenants must adhere to zoning laws, licensing requirements, and safety regulations applicable to their business.

Landlord Obligations in Pennsylvania

Landlords also have legal responsibilities to ensure a fair and functional leasing arrangement:

✔ Providing a Habitable Space – Ensuring the premises comply with local building codes and are suitable for the intended business use.

✔ Disclosing Known Property Issues – Informing tenants about any significant structural or environmental concerns.

✔ Following Proper Eviction Procedures – If a tenant defaults on the lease, landlords must adhere to Pennsylvania’s legal eviction process, which typically requires proper notice and court approval.

✔ Maintaining Common Areas – If the lease includes shared spaces, landlords must keep them in good condition and compliant with safety regulations.

Negotiating a Commercial Lease

Before signing a commercial lease, negotiation is key to ensuring a fair agreement. Here are some tips:

🔹 Understand Market Rates – Research rental rates for similar properties in the area to determine whether the lease terms are reasonable.

🔹 Negotiate Rent Increases – Try to limit rent escalations by capping annual increases or negotiating a fixed-rate increase.

🔹 Clarify Lease Obligations – Clearly define maintenance responsibilities, utility payments, and additional expenses to avoid unexpected costs.

🔹 Request Favorable Terms – Seek provisions such as early termination options, renewal rights, or tenant improvement allowances.

🔹 Get Everything in Writing – Ensure that all negotiated terms are included in the final lease document to prevent disputes.

Common Pitfalls to Avoid

❌ Signing Without Legal Review – Always consult an attorney before finalizing a lease to ensure your interests are protected.

❌ Ignoring Hidden Costs – Pay close attention to additional fees beyond base rent, such as CAM fees, maintenance costs, and insurance obligations.

❌ Overcommitting on Lease Terms – Avoid signing a long-term lease without flexibility if your business needs may change.

❌ Failing to Verify Zoning Compliance – Ensure that the property is legally zoned for your business type before signing the lease.

When to Seek Legal Assistance

A commercial lease is a legally binding contract with significant financial implications. Business owners and landlords should consider consulting a real estate attorney to:

• Review lease terms for hidden risks.

• Negotiate favorable provisions that protect their interests.

• Ensure compliance with Pennsylvania commercial lease laws.

• Resolve disputes related to lease agreements, property conditions, or eviction proceedings.

Conclusion: Need Help with a Commercial Lease? Contact Ament Law Group

Navigating a commercial lease can be challenging, but having the right legal guidance can help you secure a fair and legally sound agreement. Whether you are a business owner seeking lease review and negotiation or a landlord needing to draft an enforceable lease, Ament Law Group is here to assist.

Call Ament Law Group now at (724) 733-3500 or visit www.ament.law for expert legal advice on commercial leases in Pennsylvania.