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Commercial Real Estate FAQs

Should I form a separate business entity to hold ownership of my commercial real estate?

Yes. This protects you from many forms of personal liability. It also may allow you tax advantages. It will make it easier to sell or mortgage the property as well.

Do I need title insurance for a commercial property?

Yes. This protects your right to own and use the property from claims or rights of third parties. It is an insurance policy that will provide layers of protection. The insurance will pay to settle any legitimate claims that are made against your ownership of the property.


What are CAM charges?

These are Common Area Maintenance charges.  They are paid by the tenants to the landlord based on the amount of square footage in each tenant's rented space. The money is used to clean, maintain and repair the property, pay for the landlord's insurance, a share of the landlord's taxes and similar expenses. They are collected monthly after the landlord determines the annual costs. Most leases call for this money to be collected as “additional rent” above the base rent.

How do brokers, appraisers or lenders determine the sales price of my property?

There are many methods.

Real estate professionals look at the cash stream from the rentals and then expenses, the sales of comparable properties and then they consider the replacement costs of the land and buildings and come up with a recommended sales price.

If I have more than one tenant, do I need the same lease charge, the same monthly rent and CAM charges?

No. You can be flexible in the lease charges and lease terms. Having the same lease is convenient and avoids mistakes. Having different rents for the same property may depend on the location and size of the rented space within your property.

Some locations maybe more desirable than others and command higher payment for rent.

Most landlords base CAM charges on the amount of square footage rented plus a percentage to the total space rentable to cover the costs of maintaining the common areas, such as parking lots, sidewalks, roofs, taxes, insurance, snow plowing, etc.

Who is responsible for maintenance on a leased commercial property?

This depends on the lease. Usually, the landlord is responsible unless the lease says that the tenant is responsible for these costs. Where the landlord wants to control the maintenance and hire the contractors who will do the work, it is best to have the tenants pay the landlord and then the landlord can control the property.

What is a permitted use?

Towns and municipalities have laws called zoning ordinances. They regulate what use can be made of property in different parts of the town. These parts are called zones. A permitted use is one that is expressly allowed in this zone or part of the municipality. It is always best to check the local zoning ordinances to see if the use is permitted or if special permission is required. This special permission is called a use variance.


Should I sign a personal guarantee for a commercial lease?

No, if you can avoid it. These depends on how badly the landlord wants to rent the space to you and how much you want the space.

It's all about who has the bargaining power. In good times, landlords will almost always require a personal guarantee. Sometimes, a larger security deposit will be satisfactory. All lease terms can be negotiated depending on circumstances and needs on each side. 

Can I re-arrange or modify the space I lease?

Only with the landlord's written consent and a description of those modifications you want to make.

Additionally, you may need to satisfy local building codes and get a certificate of occupancy by satisfying the local building or construction code officials.

Can I negotiate the terms of my lease with my landlord?

Yes. You always have the right to ask for different terms or to find another landlord who will give you a better lease with terms. Be sure you have the right to end your lease and understand the costs and other actions you may be required to take.

Can I assign a Commercial lease?

The lease may have terms that prohibit this except with the landlord's express written consent. Additionally, the new tenant may need to sign a lease. You may still be obligated to pay the rent if the new tenant does not. Contact our law firm to have us give you a clear understanding of your rights and obligations.


Initial meetings with an attorney should be more than a “meet and greet” session. Often, real progress toward a possible solution can be made. Your first consultation with Bill Wolfson is offered free of charge. We invite you to schedule it today so that you can get immediate answers to your most pressing questions.