The Ins and Outs of Negotiating a Commercial Lease
Whether you’re just starting out or you are a seasoned business owner, making sure your commercial lease is beneficial to you as a tenant is vital. There are several types of commercial leases, and some important factors must be taken into account before you even think of signing anything. Seeking the counsel of an experienced real estate transaction lawyer to help you understand this complex contract and guide you through the negotiation process will ensure your rights and interests are protected.
Consider the Length of Your Commercial Lease
Depending on how well your business is established and what type of business you’re in, it may be a good idea to sign a short-term lease in the beginning. A term of one or two years with an option to renew is usually best for small businesses. That way you’re not committed for a long period of time but your lease gives you the option to stay if it’s a good fit. However, if your business is a very location-dependent establishment such as a restaurant, a long-term lease of five or more years may make more sense.
Do Your Research on Local Rent Costs, Zoning and Other Requirements
Check out comparable rents in the area and talk with your city or township zoning officer before you start negotiations on any lease. Zoning rules vary according to location, and if something is prohibited or you need to get a variance, it’s best to be aware of these facts and consult with an experienced attorney before you waste your time, money and energy negotiating a commercial lease.
Some commercial leases require the tenant to be responsible for property taxes, utilities, maintenance, repairs and any damage to the property, including costly expenses such as fixing or repairing HVAC, plumbing and electrical systems. If you decide to sign a long-term lease, it is essential to insist on certain concessions from the landlord. This means asking for items in relation to the length of the lease such as move-in allowances, free rent and renovations or improvements to the property at the landlord’s expense. A knowledgeable lawyer for contractswill advise you on which modifications to the lease will benefit your unique situation and ensure that the contract you end up signing is in your best interest.
Include Important Clauses
There are various clauses to protect your interests that should be included in any commercial lease. Making sure the lease includes a clause that allows you to sublease the property is important in case your business needs to relocate or close before the term expires. A co-tenancy clause will allow you to break the lease if a large anchor tenant that affects your business moves out.
Seek the Assistance of a Qualified Attorney
Leases are legal contracts and should be thoroughly scrutinized and understood before you even consider signing. Carosella & Associates’ real estate and business lawyers at our law firm in West Chester will ensure you get the best possible deal for your particular situation.