Whether you’re moving into a new office space to support a larger number of employees or opening up a store, signing a lease is a major step that requires research.
When you’re signing a lease, you have to consider the terms you’ll be agreeing on including the clauses, security deposit, use of the space, etc.
Here are some important things to look out for before signing a typical commercial lease.
Don’t Rush the Process
Picking the perfect location for your business isn’t going to be easy. It will be time-consuming and you may want to settle for a less optimal place just to get the process of commercial leases done but you will most likely regret it later.
Before signing a lease, take a day off and get advice from other business owners in a similar position or around the same area. Thinking it over might give you a reason to reconsider.
Everything is Negotiable
It would be foolish to accept the first rental terms offered by the landlord. Even if you believe the property is worth the asking price, be ready to walk away from the deal if they don’t lower it.
Doing so will make the landlord understand that the negotiations come from a place of strength. You can try to negotiate on the property’s price or other concessions included in the process.
Talk to a Lawyer Before Signing
Signing the wrong commercial lease will not only be a costly mistake, but it will also have negative repercussions on your company. A lease is as important as any legally binding contract and must be vetted and approved by a lawyer first.
Your lawyer, unlike a landlord, will have your best interest and benefit in mind. They can make the right call and ensure all of your rights are protected. Similarly, you should also hire a conveyancer to make sure you meet all the legal obligations for a property transaction just to be safe.
Know What to Ask
Signing a commercial lease is completely different from renting a residential property, including a range of responsibilities that can be difficult to deal with if you’re not already prepared. So, here are a few questions you should ask before agreeing to anything.
How Long Will I Be Tied to the Lease?
There’s no telling if your business will be thriving in a few more years or a decade later, but even if something does change, you will still be responsible for rent for the entire term of the lease.
One thing that can help reduce the length of the term is a break clause, so you should ask for any conditions that hold you back from using it.
Am I Allowed to Alter Parts of the Property?
Structural changes or alterations to the property are usually prohibited. The landlords often allow non-structural changes in the interior of the property, with prior consent.
Though, they will probably impose several conditions for the alterations and require you to remove them at the end of your lease, which can be expensive.
Is the Rent Fixed for the Whole Term?
The lease needs to cover important matters about rent. Such as, if the landlord can make changes or review the previously agreed-on fee. If yes, then what would happen if there was a disagreement?
It’s crucial to know the process of rent review in your lease, so if the issue ever arises you’ll know how to deal with it.
