Leasing commercial space can be a huge expense for the new business owner, or for the individual who is in the process of expanding a company. Being aware of this fact means that you need to do due diligence before you sign any papers. Negotiating the lease is an essential aspect of being a shrewd and savvy small business owner.
When it comes to a lease agreement, the terms of it and the rent are your first points for negotiation. When looking for commercial space to rent, it is advisable to negotiate one to two year leases, making sure that the renewal option is available to you. Factor in the potential for rent increases over the lease term. You want to be prepared in the event that this takes place.
To negotiate a lease for commercial space, it may be in your best interests to work with a broker to negotiate on your behalf with the landlord. It is also recommended that you consult with a knowledgeable and qualified real estate attorney who can provide you with helpful advice and will make sure that you are not taken advantage of in the process.
Find out if there are other expenses besides the monthly rent that you will be responsible for. Landlords who rent out commercial real estate often include additional expenses in the lease, such as upkeep for shared facilities (known as CAM or Common Area Maintenance) and fees for maintenance.
Utilities are another expense you need to think about when it comes to renting commercial space. Find out how the utilities are measured for the area you will be leasing. In some instances, water, heat and electricity may be metered on an individual basis or they may be determined by square footage.
When it comes to expenses, it would be a good idea to ask the landlord for examples of the typical costs incurred by former tenants. If you know that, you will have an idea of how much you would pay if you decided to rent the place to conduct business.
Residential leases and business leases are different when it comes to maintenance and repairs. In terms of the former, the burden for upkeep of the property generally falls to the landlord. However, commercial space leases may vary when it comes to the amount of maintenance and repairs that the tenant is expected to do. Some leases necessitate that the tenant be responsible for all of the repairs and upkeep, while others take some of the burden off of the shoulders of the tenant and only require that the individual look after such things as plumbing or air conditioning (AC) concerns.
Before you sign a lease, read it over carefully. Do not forget about the fine print as that is relevant too! It would be wise to hire a lawyer who specializes in this area to help you to understand all of the clauses found in the contract.
