hospitality business

Every commercial property lease can have its complications, but one industry, in particular, can pose some serious problems for inexperienced corporate landlords. We’re talking about hospitality businesses. Bars, restaurants, and other similar tenants can require some special preparations and detailed contracts. If you are unsure of how to handle such agreements, you should really talk to our Long Island, NY commercial landlord-tenant dispute lawyers before you enter into any deal.

Do Hospitality Businesses Need Use Clauses?

Most contracts for renting to hospitality businesses need use clauses. These use clauses can specify what kind of restaurant or bar is renting from you and establish a few limitations on how it can operate.

For example, a hospitality business that rents from you can define itself as a casual dining Italian restaurant. If the owners of the business decide to turn it into a nightclub later, it is violating the use provisions in your contract. This can protect the landlord because there are different legal considerations to concern yourself with when you are dealing with different types of businesses, but it can be limiting to a business owner who wants more flexibility.

In some cases, it can be a good idea to negotiate an expanded use cause once a tenant has been renting from you for a while. This allows hospitality businesses to change some things about themselves as they try to keep up with new trends or fulfill an owner’s vision.

How Can Renting to Multiple Hospitality Businesses Get Complex?

Another problem with renting to hospitality businesses is that they are naturally going to compete with each other. If you are renting out different spaces in the same area, there could be issues if a new restaurant comes in and does something similar to an existing tenant. That tenant could say that you violated their contract, which probably called for some kind of exclusivity. So you need to be careful about what kinds of businesses you rent to and what kinds of promises you make in your contracts.

Do I Need a Real Estate Attorney?

Drawing up a lease for a restaurant or another similar business can get complicated. There really is no simple template that can apply to every business. As a result, most landlords decide to talk to a real estate attorney. Our law firm can help you draw up contracts for each of your renters that would cover all of the unique legal considerations associated with their businesses. Then our attorneys can make sure that the contracts are accurate and detailed enough.

Contact Our Law Firm

So if you are thinking about renting out your commercial properties, contact David A. Gallo & Associates LLP first. We can schedule a consultation where we will take the time to learn more about your specific plans and needs. Then we can help you make the most out of your investment.