Brief Introduction to Car Wash Lease Agreements
A car wash lease agreement is a contract that is meant to be signed when renting a commercial property to run a car wash service. Rather than buying a commercial property outright, most car wash businesses, such as a mobile car wash, waterless car wash, automatic car wash or hand car wash, prefer to rent a space to run their business because it requires less upfront capital expenditure. The agreement sets out the terms and conditions for the lease.
The agreement is a specific type of commercial lease agreement. Any agreement which determines the legal relationship between a lessor and lessee of a commercial property is known as a commercial lease agreement.
Commercial lease agreements can be categorized according to the nature of the commercial property, which is being leased. Hence, a car wash lease contract is a lease agreement that is meant for a car wash business. The contract can also be called a commercial lease agreement; however, it is always better to be specific and call the agreement a car wash lease agreement for sufficient clarity.
Who Takes the Car Wash Lease Agreement – People Involved
When entering into any agreement, it is important to make a note of the interested parties in the agreement. The interested parties in an agreement are those who are directly affected by the agreement. The agreement is generally entered into between two parties or two people. The first party is the owner of the commercial property, who is known as the lessor. The second party is the person who desires to rent the commercial property to run a car wash, which is the lessee. You can enter into such an agreement in your name, or you can agree in the name of your company. Generally, it is advisable that your company be made party to the agreement instead of yourself.
Purpose of a Car Wash Lease Agreement
If you’re planning on renting a space to run set up a car wash in the area, you must have a lease agreement in place. The lease agreement ensures that your rights as a lessee are protected through the agreement. It prevents the landlord from taking advantage of you at a later date by raising the amount of rent which you need to pay, or by unduly asking you to vacate the space before the agreed-upon period. Apart from this, there are several clauses in a car wash lease contract that give you rights and cannot be violated by the landlord without facing legal consequences. Without a written legal agreement in place, you are subject to the whims and fancies of your landlord, which may not be in your best interest. An enforceable agreement allows you to take part in effective dispute resolution should the occasion arise.
Contents of a Car Wash Lease Agreement
Before signing a lease agreement, you should make sure that the terms of the lease are in tune with the requirements of your car wash. It is important to read and review the entire agreement so that you know what your rights are as well as the rights of the owner of the property. Car wash leases generally include the following terms:
- Amount of Rent and Time of Payment– The rent amount which is payable for the duration of the lease is set out in clear terms in the lease agreement. The amount usually depends on the size of the lease area and its location. Further, the rental agreement will spell out the due date for each payment, so that there is no room for confusion later. You should try and include the responsible party in case the property requires any repairs or maintenance, or for insurance and tax purposes.
- Security deposit– The lease agreement sets out the amount of security deposit which the lessee needs to pay to enter into the lease. It should also mention when and how the security deposit will be returned.
- Duration of the lease– The contract should specify the exact dates on which the lease begins and ends. You should make sure that the period of lease is suitable for your business requirements.
How to Draft the Car Wash Lease Agreement
You should follow these steps when drafting the contract:
The lessor and the lessee should decide and agree to all the important terms and conditions related to the contract. This includes the amount of rent, which is to be paid, the time of payment, the duration of the lease, the sharing of costs, the consequences of termination, the consequences of a breach, and any other terms which you may have felt necessary to include.
- You should ensure that everything which has been decided has been included in writing in the lease agreement itself. It does not matter if the point is a small one, you should have it drafted into the deal in clear terms
- Once the agreement has been drafted, you should read the agreement thoroughly and be assured that everything has been correctly laid out in the agreement, and nothing has been missed out or misstated.
- The agreement should then be signed by both the parties, which is the lessor and the lessee. The agreement should have been printed on stamp paper of the correct denomination.
Negotiation Strategy
To better negotiate the terms of the lease, you should:
- Check the market rates for rent in your area and per square footage. This ensures that you are getting or paying a fair price.
- Do not be quick to sign an agreement that is put in front of you. You should review and negotiate all the important points in the agreement.
Benefits of Having a Car Wash Lease Agreement
The principle benefit of entering into the contract is that you cannot be taken advantage of at a later date. All the terms and conditions which you agreed upon are set out in writing in a legally enforceable document, which ensures that you always it as a safety net in case there is a dispute.
Consequences of Violating the Agreement
The consequences of a breach of the contract are always mentioned in the lease agreement. Generally, the consequences are monetary. For example, if the duration of the lease agreement is of three years, but the lessee wants to opt-out of the agreement after two years, then he may be held liable to pay rent for six more months as compensation to the lessor. The consequences of different types of breaches are different and depend on the nature of the violation.
The importance of entering into a legally enforceable written agreement cannot be stressed when renting a space for a car wash. Oral agreements are not enforceable in courts and are unreliable in case a dispute arises. You should take the advice of a lawyer for the purposes of drafting or reviewing the agreement, to ensure that your best interests are protected.