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What Are the Different Types of Illinois Commercial Lease Agreements?

Posted on in DuPage County Real Estate Attorney

IL real estate lawyerA commercial lease agreement is a written contract used to rent an office, retail, or industrial space. This legally binding document outlines the terms and conditions associated with renting the space. These types of leases are generally more involved than a residential lease because commercial properties cost more to maintain. The contract is typically between a party who owns a commercial property (landlord) and a tenant who rents the property or building space in order to operate a business, usually in the retail, office, or industrial fields. Per Illinois real estate law, there are certain issues that must be addressed in a commercial lease agreement in order for it to be valid.

Finding the Right Fit for Your Business

Commercial leases are important since they provide income for the property owner or landlord and also provides the business owner with a safe and secure place in which to do business. In addition, these agreements establish rules for how the business can be conducted, as well as the rights and responsibilities of each party. Specific details about what kind of business will be conducted should be clearly stated so as to avoid any illegal activity. Standard residential leases usually last one or two years, while a commercial lease can be 10 years or more, especially if the business is thriving.

Similar to other states, Illinois has three main types of commercial leases:

  • Gross Leases: Commercial tenants often prefer this type of lease because the tenant is only responsible for the rental value of the property. The landlord pays the property insurance, taxes, maintenance or repair fees, and some of the utilities (heat, water, electricity).
  • Triple Net Leases: This kind of lease arrangement is more favorable toward the landlord. The tenant is required to pay the rental value for the property in addition to the insurance, property tax, and other miscellaneous expenses.
  • Modified Gross Leases: Considered more of a hybrid lease option, this can be attractive to both parties. With this lease, both parties determine together what building costs they will be responsible for paying. For example, the tenant may pay the rental fee and the maintenance expenses, while the landlord will pay the property tax, the insurance, and any miscellaneous costs.

Miscellaneous fees may include Internet, parking garage services, or a building security system. Under Illinois law, every landlord must disclose to potential commercial tenants any problems or defects in the property. This includes the presence of radon gas or lead paint (mostly in construction before 1978).

Contact a Wheaton, IL Real Estate Lawyer

Whether you are a business owner or a landlord, it is important to understand the terms of a commercial lease agreement. At Stock, Carlson & Duff, LLC, we can help you draft this important document to ensure your rights are protected. Our dedicated DuPage County real estate attorneys are prepared to settle disputes through negotiation, arbitration, mediation, or litigation if necessary. Call our office today at 630-665-2500 to schedule a confidential consultation.

 

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2201&ChapterID=62

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=081000050HArt%2E+2A+Pt%2E+5+Sub%2E+A&ActID=2301&ChapterID=66&SeqStart=20100000&SeqEnd=20900000

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