What is the difference between a commercial and a residential lease?

A commercial lease is a legally binding agreement between a landlord and a tenant for the rental of commercial space for a business. The terms of a commercial lease are typically much more stringent than those of a residential lease. One of the primary differences between a commercial and a residential lease is the length of the lease agreement. A residential lease typically lasts for a year or less, while a commercial lease usually lasts for three to five years. Additionally, commercial leases are often set up as a month-to-month arrangement, allowing for more flexibility and a greater potential for negotiation. The other big difference between a commercial and a residential lease is the amount of money that the tenant must pay upfront. In a residential lease, the tenant typically pays a security deposit. In a commercial lease, however, the tenant usually pays a much larger amount of money upfront, called a “letter of credit”. In addition, commercial leases typically contain unique provisions that are not found in residential leases. For example, the landlord may require the tenant to pay for the cost of repairs such as plumbing and electrical work. Finally, in Massachusetts, commercial leases are subject to additional laws and regulations that do not apply to residential leases. These laws include a requirement that commercial leases are filed with the local registry of deeds and a requirement that landlords provide tenants with notice of their rights and responsibilities.

What is the difference between a commercial and a residential lease?

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