Whether you are leasing, renting or managing a commercial lease, there can be many issues to consider before entering into a commercial lease, during the term of the lease and at the end of the lease - especially considering that commercial lease agreements can often be extremely long-term and of great financial importance to both landlord and tenant.
For example, a frequently asked question is related to the amount of the rent, including what can be considered a reasonable rent. Another example of a frequently asked question relates to the maintenance and renewal of the commercial lease, including both the scope and allocation of these obligations between the parties to the lease. A third example of a common question relates to the termination of the tenancy, including what demands can be made in connection with the tenant's vacating the business premises.
Highly specialized consulting
There can be many issues associated with a commercial lease. It is therefore important to have a thorough and competent advisor who can assist you when entering into a commercial lease agreement, during the tenancy itself and when it ends.
With the help of a business lease law-Attorney , you avoid the risk of disputes and increase your chances of reaching the best possible agreement based on your wishes.
A Attorney specializing in business lease law also has in-depth knowledge of the procedures and handling of any disputes that may arise. It can therefore be useful to have a legal sparring partner who is well versed in the law in order to assess and create the most favorable options for an optimal outcome.
CLEMENS offers highly specialized advice in all areas of commercial tenancy law. As one of the country's leading law firms in this area, we have built up extensive experience in advising on and handling all aspects of commercial tenancy law.
We advise both large and small landlords and tenants as well as commercial property managers, including some of the country's largest retail chains.
We advise on all aspects of business lease law
CLEMENS advises on all aspects of commercial tenancy law, including, among other things:
- Drafting and negotiating leases: A well-drafted lease drawn up by a competent advisor reduces the risk of potential disputes between landlord and tenant.
- Relationships during the tenancy: With a legal partner on your team, you can rest assured that your rights under the lease are secured and enforced in the best possible way in the event of disagreements about, for example, expenses to be paid in addition to the rent or the parties' distribution of maintenance and renewal obligations in the tenancy.
- Negotiating the transfer of a commercial lease: It can be beneficial to have the assistance of an experienced Attorney in the event that the commercial lease is to be either sublet or transferred to another party - among other things to secure the often greater financial values involved.
- Rent increase or rent reduction: A specialized advisor can help assess whether the current rent is out of line with the market rent, including the possibilities of giving notice of a rent increase or rent reduction and possibly conducting a process and legal proceedings.
- Eviction settlements: There are often many issues that need to be taken care of when the landlord and tenant go their separate ways. This typically concerns the condition of the commercial lease when the tenant moves out, the need for renovation and other complaint deadlines. It is a good idea to have an experienced Attorney at your side to ensure your legal position.
- Disputes and litigation: With a specialized, experienced and competent advisor, you can be sure that your case will be handled in the best possible way in the event that it is not possible to reach an amicable solution out of court between the parties to the lease.
FAQ
Business tenancy law, which is regulated by the Business Tenancy Act, deals with premises that are rented out exclusively for non-residential use.
Examples of commercial leases include premises that are to be used for teaching, offices, sales, fitness, storage, garages, etc. and are not used for residential purposes.
The rental of parking spaces is not covered by the Business Rental Act, as they are not "premises".
This is contrasted with residential tenancy law, which regulates residential leases and the (quite different) issues associated with this area of law.
In terms of legislation, the Danish Business Tenancy Act differs significantly from the Danish Residential Tenancy Act, as the former is characterized by a high degree of freedom of contract between the parties to the tenancy, while the latter aims to protect the tenant, which is why several of the rules of the Act, for example, cannot be derogated from by agreement.
As a result, it's common for the content of commercial lease agreements to vary greatly, which is why it's good to have a legal partner who can provide the qualified legal advice you need to make your decisions.
Commercial tenancy law is very much based on freedom of contract.
This means that the parties are more or less free to determine both the nature and scope of the rights and obligations that may be associated with entering into commercial lease agreements.
Therefore, it is not possible to provide an exhaustive list of what you as a tenant or landlord should pay particular attention to in commercial lease agreements, as it often depends largely on very specific circumstances, including how far the parties are commercially willing to go to reach a reasonable agreement - for example, the scope of the lease, the size of the rent, rent adjustment, maintenance and renewal obligations, sublease and surrender, and the parties' obligations when moving out.
A lease and other commercial tenancy agreements must be drawn up in writing when one of the parties requires it, and it can be deduced from this that there is no written requirement in commercial tenancy law.
For the sake of order, however, a written lease agreement should always be drawn up for commercial leases, setting out the rights and obligations of the parties. This is especially true if the parties wish to agree to opt out of the deviating rules of the Danish Commercial Code, which is almost always the case.
In addition, there are no requirements for commercial leases, and unless otherwise agreed, the rules of the Commercial Lease Act apply.
From time to time, it is seen that the landlord and tenant have entered into a tenancy without any position on what should actually apply between them regarding the commercial lease.
In such a case, the provisions of the Commercial Tenancy Act shall apply in full, unless otherwise agreed or deemed to be included in the agreement.
In commercial tenancy law, a distinction is mainly made between fixed (annual) adjustments and market rent adjustments.
The former type of adjustment requires an agreement between the parties to the lease. This means that if, for example, the annual rent is to be adjusted once a year in accordance with the percentage change in the net price index, the parties must have agreed on this.
If the parties have not agreed on this, the annual rent can only be adjusted according to the rules on market rent if the conditions for this are otherwise met, or if the annual rent at some point proves to be unreasonably high or low.
Each party to the lease may, during the lease term, demand that the rent be adjusted to the market rent if the applicable rent is significantly lower or significantly higher than the market rent.
However, the above assumes that the conditions for demanding that the rent be adjusted to market rent are met and that there are no other obstacles to notification in the form of, for example, an agreed rent freeze period.
The market rent is the rent that a knowledgeable tenant and a knowledgeable landlord would agree on at the time of notification for the tenancy in question, taking into account, among other things, the terms, location, use, size, quality, equipment and state of maintenance of the premises.
Questions about market rent can thus be a big mouthful, just as both the other provisions of the Commercial Tenancy Act and case law in the area can have an impact on and in the specific situation.
The starting point under the Commercial Tenancy Act is that the tenant is free to terminate the lease. However, the right to do so may be restricted if an irrevocability period has been agreed.
The landlord's right to terminate the lease is somewhat more limited unless it is a so-called "establishment lease", garage, stables or similar. If this is not the case, the landlord can only terminate the commercial lease when one of the reasons set out in the Commercial Lease Act applies - for example, if the property in which the commercial lease is located is to be demolished, and special formal requirements apply.
The lease can also be made non-terminable for the landlord.
When the commercial lease is vacated, it must be returned in the condition agreed upon by the parties.
What exactly this means can often lead to a dispute between the landlord and the vacating tenant.
This may, for example, be due to disagreements about the condition of the commercial lease at the time of takeover and vacancy if there is no proper documentation or descriptions in the lease contract.
If the parties have not agreed on how the commercial lease is to be handed over at the time of vacating, the rule of law is that the commercial lease must be handed over in the same condition as at the time of taking over, with the exception of deterioration due to wear and tear, which is not covered by the tenant's maintenance obligation, and defects that the landlord is responsible for repairing.
Disputes arising from the Danish Commercial Tenancy Act or the lease agreement concerning commercial leases covered by the Danish Commercial Tenancy Act are brought in the first instance before the district court. The court is called the housing court, and it is possible for the parties to each appoint a housing court judge with special expertise in commercial tenancy law who, together with the legal judge, helps to decide the case.
However, the parties may agree that their disputes, if any, shall be settled either in whole or in part by arbitration.
Disputes and conflicts in commercial tenancy law can sometimes prove to be a costly affair. Therefore, it is always recommended to seek legal assistance in order to achieve the best possible outcome and mitigate any risks that may be associated with a dispute and conflict.
