A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.
The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.
Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.
A commercial landlord’s responsibilities are generally determined by the specific language in the written lease agreement and the state's contract law.
Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a landlord who does not perform its responsibilities under a commercial lease in good faith or who is not fair in its dealings with the tenant may be in breach of the landlord’s implied duty of good faith and fair dealing.
In Illinois, a business that leases commercial space—such as offices, warehouses, or retail locations—must typically enter into a written commercial lease agreement. Unlike residential tenants, commercial tenants are presumed to have greater knowledge and sophistication in business matters and therefore are afforded fewer legal protections under the law. It is crucial for a commercial tenant to thoroughly review, understand, and negotiate the terms of a lease agreement before signing, as the lease's provisions can significantly affect the business's operations and financial health. The obligations of a commercial landlord in Illinois are primarily dictated by the terms of the lease agreement and general contract law. Illinois contract law does recognize an implied duty of good faith and fair dealing in contractual relationships. If a landlord fails to act in good faith or deal fairly with a commercial tenant, this could constitute a breach of the implied duty, potentially giving rise to legal claims by the tenant. However, the specific rights and remedies available will depend on the circumstances and the language of the lease agreement.