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Category Archives: Real Estate

Categories Business Law, Real Estate

What Every Commercial Tenant Should Know Before Signing a Lease in Texas

Author Rosemary Weiland Categories Business Law, Real Estate Posted on

Avoid costly mistakes by understanding the fine print of your lease agreement.

Signing a commercial lease in Texas is a major business decision, and one that can impact your bottom line for years to come. Unlike residential leases, commercial leases in Texas are largely unregulated and highly customizable, which means tenants must be vigilant.

At Saunders, Walsh & Beard, we regularly help business owners navigate complex lease agreements. Here are some of the most important issues every tenant should understand before committing:

  1. Lease Type Matters More Than You Think
    Is it a gross lease, net lease, or triple net (NNN) lease? In NNN leases, which are common in Texas, tenants are often responsible for taxes, insurance, and property maintenance. Understanding the financial structure can help you avoid unexpected costs.
  1. Who’s Responsible for Repairs?
    Many Texas leases shift the burden of HVAC, roof, and even structural repairs onto the tenant. Always clarify responsibilities and consider negotiating a cap on major repair costs.
  1. Renewals and Early Termination
    Watch for automatic renewal clauses and rigid termination terms. If your business outgrows the space or operations stall, these clauses can trap you.
  1. Escalating Rent and CAM Charges
    Leases often include annual rent increases and Common Area Maintenance (CAM) fees. Ask for historic

    What to know before signing a commercial lease.

    al expense reports and consider negotiating audit rights and limits on increases.

  1. Use Restrictions
    A narrow use clause can prevent you from expanding services or subleasing. Request broader language that accommodates your current and future business operations.
  1. Assignment, Subleasing, and Exit Strategy
    Without the right language, landlords can block a transfer or keep you liable after you exit. Protect yourself by negotiating assignment rights and liability releases.
  1. Lockouts and Landlord Remedies
    Texas law permits commercial lockouts if rent isn’t paid. Ensure your lease includes notice and cure periods to avoid abrupt business interruptions.
  1. Personal Guaranties
    If you’re signing on behalf of an LLC or corporation, the landlord may still ask for a personal guaranty. Limit its duration and scope whenever possible.
  1. Dispute Resolution and Venue
    Arbitration clauses and far-away court venues can work against you. Aim for local venue provisions and consider requiring mediation before litigation.
  1. Improvements and Build-Outs
    Know whether you’re allowed to modify the space, and whether you’ll need to remove improvements when you leave. Ask about tenant improvement (TI) allowances upfront.
  1. Insurance and Liability
    Ensure your insurance obligations are reasonable and request a waiver of subrogation to protect against third-party claims.
  1. Force Majeure and Shutdowns
    After COVID-19, many landlords now exclude pandemic-related rent relief. Negotiate protections for future business interruptions.

 

Final Word: Protect Yourself Before You Sign
Texas is a landlord-friendly state. That’s why it’s essential to have a knowledgeable attorney review (and if necessary, negotiate) your lease before signing. At Saunders, Walsh & Beard, we’re here to ensure your lease works for your business, not against it.

Need help with a lease? Contact us today to schedule a consultation with a commercial real estate attorney.

Categories Real Estate

5 Common Commercial Leasing Mistakes to Avoid

Author swb Categories Real Estate Posted on

What was once a dream has turned into a successful business and now it’s time to expand beyond the current space. Pursue Direct Damages or Consequential Damages with Saunders, Walsh & Beard At Your Side But before you sign a lease on the first space you visit, try to avoid these five common commercial leasing mistakes.

1. Focusing on aesthetics over need.

As an expanding business owner, it is nice to want the premium location with all the bells and whistles, but is it affordable? There is a great risk that comes with business expansion and the last thing you want is to bury the bulk of your expenses into space you don’t need… yet. Find an area that fits your needs within your budget now and look for the luxurious spot after the business has established long-term profitability. There are ways to preserve the right to expand.

2. Agreeing to a long-term lease.

The financial terms usually are better the longer the lease, but so is the risk. What happens if you sign a five-year lease but the business folds within the first three? The business has failed and now you have the burden of paying for an office space you no longer need. The initial investment of a shorter lease is greater, but the flexibility you gain is invaluable.

3. Not considering the Rate of Fluctuation.

As a tenant, you sign the lease with a given set of terms but you may not have noticed the right to reevaluate clause included in the small print. Because of this unaddressed contractual language, the landlord may have the right to raise your rent at any moment for any reason. If there is a sudden financial windfall with other clients and the landlord wants to take advantage of a tenant-wide rent increase, he could. Hiring a real estate attorney will reduce the risk of this happening, but if not, random rent hikes are possible until you renew the lease.

4. Failing to negotiate an opt-out clause.

Things happen in business. There is no greater fear than an obligation to a contract that is no longer beneficial. Whether it’s language that allows for subleasing or determining the payment process in the event of bankruptcy, it is important to be able to opt out of the lease if at all possible. It could result in paying more on the front end but the protection is a must-have.

5. Not hiring a real estate attorney.

Not hiring a real estate lawyer to review the lease may seem cost effective in the beginning. But everything is negotiable and having an expert review the terms of the lease would be beneficial over the term of your lease. Having a long-term relationship with a trusted lawyer is a good business decision.

Even if you were fortunate to avoid these pitfalls, it still is important to have the right law firm representing you. Saunders Walsh & Beard is an experienced firm intended on assisting you and your business in all legal needs. For additional information about commercial real estate or to make arrangements for an initial consultation with one of our top-rated attorneys, call our law office directly at (214) 919-3555.

Categories Real Estate

Commercial Real Estate Purchase Client Success!

Author swb Categories Real Estate Posted on

Congratulations to Katie Thiele and one of our clients, a large residential management company, for navigating their 3rd and largest (so far), acquisition of a $14,000,000 apartment complex in East Texas. This commercial real estate purchase transaction included it all—securities counsel, a $10,000,000 loan from a difficult lender, last minute extensions, and even a structural fire just prior to closing.

Great job getting it across the finish line, Katie!