Commercial vs. Residential Leases, What is the Difference? Part 1 of 2.

Most people are familiar with residential leases and some assume that a commercial lease operates in a similar way, but there are many important differences. Not knowing the differences when you are looking for office space can result in the tenant signing a lease that is not in their favor.  Residential leases usually are not negotiated and have standard forms, where as commercial leases are highly negotiable and can highly differ from tenant to tenant. 

Legal Protections

Residential tenants have a lot of legal protection against landlords because it is assumed that your average residential tenant does not have the same business expertise that a landlord has. In commercial real estate, the law assumes that business owners have an equal footing with the landlord and so there is less protection for you as a tenant in terms of negotiating the lease.  

Repairs and Maintenance

In residential leases, the standard is that the landlord is responsible for maintenance and repair of anything and everything in the leased space unless the tenant causes something to break. In commercial leases, this isn’t always the case. In fact in some cases, the tenant is responsible for both the maintenance, repair and replacement of their HVAC system, which can be very expensive. 

One thing some landlords will agree to is to put a repair cap in the lease, which states that the tenant is responsible for certain repairs inside the space but that they only have to pay up to a certain amount per repair and the landlord has to cover the cost above that. 

At Centerco Office Suites in St. Louis you will work with a team of experienced commercial real estate professionals to walk you through the leasing process to make it easier for you. 


Scroll to Top