Renting commercial space is a big responsibility—the success or failure of your business could ride on certain terms of the lease. You should understand how commercial leases differ from the more common residential variety. Before you sign anything, make sure you understand and agree with the basic terms of the lease, such as the amount of rent, the length of the lease, and the configuration of the physical space.
Practically and legally speaking, commercial leases and residential leases are quite different. Here are the main distinctions between them:
Before signing a lease agreement, you should carefully investigate its terms to make sure the lease meets your business’s needs. Consider the amount of rent and the length of the lease. Don’t tie yourself to a five- or ten-year lease if you can help it; your business could grow faster than you expect, or the location might not work out for you. A short-term lease with renewal options is usually safer.
Think about the physical space. If your business requires modifications to the existing space—for example, adding cubicles, raising a loading dock, or rewiring for better communications—make sure that you (or the landlord) will be able to make the necessary changes.
Other items spelled out in the lease might be just as crucial to your business’s success. For instance, be sure that your lease gives you the right to put up a sign that’s visible from the street. Make sure your lease prevents the landlord from leasing space to a competitor.
Before entering into negotiations, you need to learn a bit about the terms of a business lease. The following list includes many items that are often addressed in commercial leases. Pay attention to terms regarding:
Familiarize yourself with the space including common areas such as hallways, restrooms, and elevators. Review how the landlord measures the space -some measurement practices include the thickness of the walls.
Commercial leases can quickly become complicated and you might have various considerations when looking for and negotiating the perfect spot for your business. If you need help specifying certain conditions for your business or defining legal terms, consider talking to a contracts attorney with experience negotiating commercial leases. They’ll know which terms and conditions to fight for, and they can clearly explain your responsibilities under the lease.
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