Restaurant Lease Agreements

A Commercial "Restaurant" Lease Agreement is a written contract entered into between a Landlord and a Tenant for a particular retail establishment which sets forth the rights and obligations of each party over a designated period of time.  The restaurant lease you sign can have a profound impact on the success or failure of your business.  Your restaurant lease can bind you to a property for up to twenty years, meaning that the rights and obligations of both you and your landlord will be established at the beginning of your relationship but interpreted countless times over the next one to two decades. 

Restaurant lease provisions such as: lease term, rent, additional rent (e.g. real estate taxes, insurance, utilities, CAM charges), assignability, personal guaranty, and options to renew are extremely important and must be carefully considered and negotiated.  Restaurant leases are extremely complex as they address several provisions not typical in general commercial leases entered into by other businesses.  As an example, provisions must be built into the restaurant lease that allows owners to cancel their lease if their liquor license application is denied by the State Liquor Authority.  Provisions pertaining to pest control, waste management, grease and oil recycling, and sidewalk dinning, among other terms, should also be addressed.

When you find a desirable location, ask whether a prior restaurant occupied the space.  Just because a location is zoned to permit a restaurant does not mean that a restaurant would be viable in that space.  Sufficient public restrooms, water sources, outside ventilation and garbage deposits are paramount.  Additionally, if you anticipate a need to renovate, consider bringing your contractor with you when you view the space so that he can give you a realistic expectation of what the renovations needs and costs will be.  I would also encourage you to speak with tenants of the building as well as neighborhood residents to get their opinion on the location and your restaurant concept.

If the location is suitable for your needs, proceed cautiously through your negotiation of the commercial lease terms and retain an attorney if possible.  Every location and every landlord is different but almost all leases have some wiggle room. 

If you are considering entering into a commercial lease for a Restaurant, Bar, Lounge or Nightclub, please call DiPasquale & Summers for a free consultation.

Landlord Disputes can Force Restaurant Closures in New York City




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