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Draft Your Alabama Lease Carefully

If you’ve ever been a landlord in the state of Alabama, you will certainly agree that it comes with his own share of headaches. You might even ask yourself whether or not landlords in Alabama have any real rights against tenants who abuse the privilege of leasing the property.

Landlords in this state do in fact have statutory rights that can be protected, but the process of protecting those rights must begin at the beginning of the landlord-tenant relationship and continue through the lease.

Commercial relationships are treated much differently by Alabama law from a residential relationship dealing with a private residence. This difference in treatment is presumed to be based on the bargaining position between the two parties in the contract. Both parties to a business landlord-tenant relationship are presumed to understand the contract much better than a non-business tenant. Every successful landlord – tenant relationship starts with a high-quality contract that considers all aspects of the relationship. It is a business relationship and nothing more. If you ever stop taking the landlord-tenant relationship seriously, it will only lead to trouble.

It seems that the most common problem with leasing is encouraging the tenant to actually pay the rent. In a commercial lease situation, a landlord actually has a lien on the goods, inventory or equipment located on the property being leased. This fact should be covered in the lease even though it is in fact covered by the law. Another little known fact about commercial leasing is the ability that the law allows for the landlord to quickly access the property when the tenant has defaulted on the agreement. One of the defaults could in fact be nonpayment of rent. This is a significantly different set of circumstances than if you are a landlord of a residential home or dwelling. Commercial landlords have a bit more flexibility when it comes to enforcing their rights under the law, but that assumes that the lease agreement allows for such flexibility. A lease agreement can in fact relax or even waive some of the rights a landlord has by law, so landlords should be quite careful when their leases are being drafted.

What if your tenant leaves the building but their bills for goods or services are not paid? Does the other company have a lien on your building for the value of the unpaid bill? What if the tenant does not pay the sewer bill? Does the sewer company rightfully have a lien on your building? When it comes time to cut ties with your commercial tenant, be careful to give the proper notice. Although the notice is not quite as long as in a residential lease, a notice period is necessary and it must meet certain standards either under the lease or according to law. Many times a tenant wants to build or perform renovations to your building. How do you build this into the lease agreement? Do you own what has been built, or does the tenant have to tear it out when they leave? How do you protect your property? I highly recommend a lawyer’s touch as a preventative measure when drafting a commercial lease. Making sure that you take advantage of all that the law has to offer will pay dividends when you realize that your business tenant is taking advantage of the situation.

The Alabama Residential Landlord Tenant Act goes much farther in protecting a tenant from either an overbearing landlord or a landlord who does not hold up his end of the agreement. Both the landlord and the tenant have specific right and obligations under the law. Maybe, I’ll discuss those in the next time.

There is no legal advice intended in this article, and the accuracy of the information is not guaranteed. The information presented in this article may not reflect the most current legal developments, and a lawyer should be consulted prior to your reliance on the information provided.

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