The commercial real estate rules in the US have similarities across states, but there are differences as well. Texas especially has some unique elements that are generally absent from the rule book for other states. Although commercial real estate rules in Texas are predominantly similar to those in several states, it is always better to know more about the differences to avoid future problems.

This blog will mention the most prominent rules specific to the state that will affect your overall agreements. The CHRE team will also ensure that we inform you about them in advance, so you are fully aware of the conditions you agree to.

Commercial Real Estate Rules in Texas

Commercial real estate in Texas has been thriving for the past several years. Several businesses have recently started operating in the region, prompting an increase in economic activity and business prosperity. If you are a commercial real estate investor or tenant, the following are some of the details to keep in mind before entering partnerships:

1. Commercial Landlords Can Lock Out Tenants for Non-Payment

Tenants are typically at an advantage in most states in the US, even if they default on rent payments. However, this rule does not apply to the industry in Texas. Landlords in the state have the legal right to lock out tenants if they default on rent payments for a few months.

Additionally, the landlords also have the right to use the tenanted property in the building to cover any losses from the default. Therefore, landlords have the advantage, and tenants need to be careful how they manage payments to prevent any inconvenience.

2. Tenants Need Landlord Consent for Subletting

Most commercial real estate tenants can sublet the space without needing official permission from the landlord. It is understood and legal in most states. However, any commercial real estate tenant who wants to sublet the space needs to get signed permission from the landlord to allow them to sublet.

If you have moved from another state, it is essential to keep this detail in mind because neglect will allow the other party to pursue legal action.

3. Commercial Tenants Must Pay 12 months of Rent Upfront

The lease rules for commercial real estate in Texas assert that the tenant must pay 12 months of rent after the lease period starts. The landlord has the legal right to demand this payment and can deny granting access if the condition is not fulfilled.

However, most landlords do not strictly follow this provision and, at most, collect first month’s rent, last month’s rent and security deposit from tenants, which is a more usual practice.

Wrapping Up

Overall, the commercial real estate rules in Texas are generally more favorable for landlords. Both parties need to keep them in mind to operate in the market and avoid confusion or mishaps successfully.

Please contact the CHRE team to find a commercial property or prospective tenants. We have operated in the industry for several years and will provide optimal and efficient solutions.