Top Legal Issues Dallas Businesses Face in Commercial Real Estate Leases
Texas’s commercial real estate market is growing rapidly, creating opportunities for both tenants and owners of commercial properties. However, the legal side of commercial ownership and leasing can be hard to navigate. The state laws that govern landlord/tenant relationships, leases, and property rights are extremely detailed and unique.
Whether you’re leasing a single office space or managing numerous rental properties, understanding Texas commercial real estate law is necessary when it comes to protecting your rights and sidestepping expensive legal issues. To talk to a skilled Dallas commercial real estate lawyer, call Coleman Jackson, P.C. today.
Terms and Definitions of a Lease
It is not unusual for disputes to stem from wording that is vague or inadequately defined. Even seemingly simple terms, such as who handles maintenance, how common area costs are shared, or what subletting is allowed, can end up meaning very different things to landlords and tenants.
In the absence of clear definitions, routine structural maintenance or the right to modify a space can escalate into serious but avoidable legal disputes.
CAM Charges, Repairs, and Maintenance
One of the most frequently contested elements of a commercial lease is deciding who is going to pay for what. This issue often arises where net leases are concerned, specifically triple net agreements, that make tenants responsible for expenses like maintenance, insurance, and property taxes. Although the specific terms can vary from one lease to the next, misunderstandings about what these responsibilities entail can quickly lead to disagreements.
Commercial real estate disputes in Dallas often involve:
- Vague definitions of “necessary” maintenance: Disputes can arise when landlords and tenants have differing interpretations of maintenance obligations, especially when it comes to what counts as necessary improvements or repairs.
- Unforeseen or emergency repairs: When unexpected problems arise, like plumbing problems or electrical issues, disagreements can emerge over who is liable for the cost and coordination of the repair work.
- Upkeep of common areas: Expenses arising from the cleaning, landscaping, or maintenance of shared facilities are also a common point of contention if they are not clearly stated in the lease agreement.
Giving tenants the right to audit landlord expenses and adding clear limits to common area maintenance charges, referred to as CAM charges, can help keep expectations transparent and avoid future misunderstandings.
Rent Escalations and Rental Payments
When basic terms are unclear, disputes can happen. Usual problems include rent hikes based on the Consumer Price Index, percentage lease agreements, and missed or late payments. To avoid issues later on, lease agreements should outline how rent increases and penalties are calculated, and the verification process for each.
Subletting, Renewal, and Termination
One of the most common areas of conflict in lease agreements involves lease transitions. For example, renewal and termination issues often come down to notice, as in whether the tenant gave the landlord reasonable notice before ending the lease or accidentally renewed it by staying silent. Subletting concerns typically center around whether or not the tenant has the right to transfer the lease and, if so, what conditions apply.
Default and Lockouts
Texas law states that, in cases where a tenant abandons or defaults on their commercial lease, landlords have specific rights. For example, a landlord is well within their rights to lock out a tenant who has not paid their rent, but once the payment is current, they have to allow the tenant back inside. Mistakes involving tenant access can lead to claims of breach of contract or even wrongful eviction.
Building Conditions and Safety
Commercial properties are accompanied by unique safety requirements. Landlords might be expected to provide security, address hazards, and/or maintain the structural integrity of the property. In certain cases, the conduct of a single tenant can threaten the safety of other occupants.
Conflicts arising from disagreements over who handles repairs and maintenance or safety issues can lead to litigation.
Talk to an Experienced Dallas Commercial Real Estate Lawyer
Commercial lease disputes usually involve compliance issues, contract interpretation, and the balancing of competing real estate and business interests. Trying to settle these types of conflicts without legal guidance can result in unnecessary expenditures as well as jeopardize your own best interests.
An experienced Dallas commercial real estate lawyer can help by:
- Analyze the lease and clarify each party’s obligations: A lawyer can review the agreement to ensure you fully understand your rights and responsibilities under the contract.
- Evaluate potential breaches or wrongful conduct: They can determine whether the other party has failed to meet their obligations or acted improperly, and advise you on your legal options.
- Negotiate fair resolutions: An attorney can help you pursue a settlement that protects your interests while preserving important business relationships.
- Represent you in dispute resolution or court: If negotiation isn’t successful, your lawyer can advocate for you through mediation, arbitration, or formal litigation.
If you’re facing a commercial lease dispute in Dallas, a Dallas commercial real estate lawyer from Coleman Jackson, P.C., can help. Call us today at (214) 599-0431 or reach out online to schedule your confidential legal consultation.
This law blog is written by attorneys at Coleman Jackson, P.C., located at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206, for educational purposes only. It does not create an attorney-client relationship between this law firm and the reader. You should consult with legal counsel in your geographic area regarding any legal issues impacting you, your family, or business.
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