A commercial abatement is an agreement between a landlord and a tenant. A commercial abatement grants a tenant the right to occupy a rental space for free or at a reduced cost. During the abatement period, improvements are made to the commercial space.
Abatements are often sought when a rental space is in need of repairs. A plumbing problem, a fire, or another issue could hinder a lessee's ability to use the rental space as planned. In this type of situation, a landlord may grant an abatement. During the abatement period, the tenant will not be responsible for paying the standard amount of rent. In fact, they may not need to make any payments for a predetermined amount of time.
A landlord will use this time to have upgrades made to the rental. A tenant should be prepared to make modifications to their business plans. If one or more areas within a rental are not habitable, a tenant may need to conduct business in the parts of the rental that haven't been affected.
A tenant should also be receptive to dealing with construction crews and contractors. If major work needs to be completed, a landlord will have the right to schedule the repairs as they wish. The repair work will need to be conducted within the timeframe that the abatement outlines. Each crew or contractor may need to perform work duties indoors or outdoors.
Considerations For The Tenant
An abatement is typically sought at the onset of becoming a tenant. A potential tenant may inspect a commercial rental but discover that repair work needs to be performed. If the individual would like to ultimately have the right to use the space for business purposes, they should consult with the property owner. During the consultation, they can point out the problems with the rental.
The owner of the property may perform an inspection of the rental. They may consult with various contractors about the repairs that need to be made. Then, the property owner will decide if an abatement will be granted. A new tenant may be expected to sign a lease, once an abatement has been granted. They may even be required to pay the first month's rent and a security deposit.
After the rental space has been repaired, a tenant will be able to use the rental space in the manner that they originally planned on. It is a tenant's responsibility to fulfill the terms of the lease. If they ultimately break the lease, they will be responsible for paying costs to their landlord.
For more information on commercial abatements, contact a contractor near you.