What is a common area in a commercial building?
A common area in a commercial building is an area that is open to all tenants rather than being reserved for the exclusive use of a single tenant. Lobbies and hallways, which are found in virtually all office spaces, are the most common examples of common areas. Other examples include restrooms, kitchens, conference rooms, and gyms.
Common areas often have rules associated with them. For instance, tenants who want to use a conference room may need to reserve the space in advance. A gym or other common area may be available for employees only and not guests.
Many leases include a list of common areas or a description of what constitutes a common area. Tenants may also receive floor plans or maps of the building that specify where common areas are and who can access them. Documents that are not part of the Commercial Lease Agreement generally are not legally binding. But they can be useful in cases of ambiguity, such as when the lease vaguely defines common areas rather than providing specific definitions.
Can landlords convert common area spaces for another purpose?
As a landlord, what you can do with a common area comes down to your Commercial Lease Agreements with your tenants. Leases will often require that tenants have access to specific amenities. There also may be more general terms that prevent you from reducing services or making changes that could affect:
- Foot traffic.
- Access to parking.
If you are taking away an amenity required by the lease, you may need to reduce the rent, or provide the tenant with a new amenity as a concession.
If a common area is not protected by a Lease Agreement, a landlord generally has free rights to convert the space as they choose. For example, a conference room open to all tenants could be converted into rented office space. However, there may be limits if the new use interferes with other tenants. You may not be able to convert a ground-floor common space into a machine shop, for example, if the noise would unreasonably disturb nearby office tenants.
You may want to consider practical matters such as tenant satisfaction. If you take away amenities that are common in similar buildings, your current and prospective tenants may look elsewhere, causing lease renewals and lease signings to decrease.
Does a landlord have to provide notice to change common area spaces?
Generally, you would not need to provide notice of your plans to convert common area space unless the lease requires notice. Most Non-Residential and Commercial Leases that require notice for common area closures probably only address temporary closures for things like maintenance or renovations. Tenants who want to guarantee common area access usually make sure that access is included in their lease. However, it is still good practice for a landlord to give notice.
If you want to make changes to common areas that are protected by a lease, you might have an easier time doing so at lease renewal time. In the new lease, you can either give a specific date for the conversion or state the new terms regarding common areas.
You may want to consider the potential for noise and other disruptions if construction work will be done. In addition to needing to give notice, some leases will restrict the hours that loud work can be done. Unlike in a Residential Lease, a Commercial Lease might require work to be done only on nights and weekends rather than during business hours.
Can a landlord charge extra rent or fees after upgrading common areas?
If you convert a common area to a fitness center or some other valuable amenity, you may be able to charge extra, depending on the terms of your lease.
First, check if the lease says that the tenant has access to all common areas. This term may have been put in place when the building only had basic services, but it may include new upgrades. If a current lease clause covers the new upgrade, you would not be able to raise the rent or add a new fee without the tenant agreeing to it. However, if the lease requires tenants to pay variable common area maintenance expenses, the tenant may have to pay any added expenses subject to any limits in their lease.
For anything not covered by an existing lease, you can generally charge a fee for use or negotiate a higher rent. You typically cannot raise the rent during the term of a lease without the tenant's consent, but you also do not have to allow the tenant to use new services. For example, you might offer the use of a new fitness center if current tenants pay $20 per employee per month, or agree to a 5% rent increase. Tenants can then choose whether or not they want to use the fitness center.
To learn more about the legal issues surrounding common spaces in commercial buildings or to get answers to your specific questions about your commercial lease, reach out to a Rocket Lawyer On Call® attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.