Small commercial landlords are being too soft on their tenants and are skimping on professional advice, according to Black Country law firm George Green.
It says that as a result, many are losing money.
Ceri Mort, commercial property partner at George Green, says that the continuing strong growth in the value of commercial property, compared to static house prices, has tempted many private individuals to switch out of residential property and into commercial property.
"Landlords face a different set of challenges owning commercial property, as opposed to residential, and our survey found that many small commercial landlords are simply not tough enough or sufficiently well organised, when it comes to dealing with tenants," said Ms Mort, who is based in George Green's Cradley Heath offices.
"They also, unwisely, try to cut corners when it comes to taking professional advice."
In the firm's poll of commercial property owners based throughout Birmingham and the Black Country, George Green found that some commercial landlords were consistently taking risks when letting property to new tenants, which often came back to haunt them.
Ms Mort said: "The most common mistake landlords are making is to let tenants into their premises without having completed the legal documentation. They believe they have a deal and that the tenant will sign the lease, but what many do not understand is that allowing tenants access or occupation can drastically weaken their position.
"If a tenant gains entry to the premises and starts paying rent then it is likely that he will automatically gain protection under the 1954 Landlord and Tenant Act, which means the landlord is obliged to grant a new lease, should the tenant want one, which could scupper any long term development plans. The tenant then has no incentive to sign the landlord's lease.
"What is worse is that the terms of the lease are effectively unknown, which can make it difficult to sell or remortgage the property."
However, Ms Mort claims there is an easy solution.
"One quick phone call to their lawyer before allowing tenants access should ensure that the landlord can put in place a Tenancy at Will, which will have a very short notice period, as it can literally be terminated at will."