Finding the right location for your business is an important factor in its success. It’s just as important to get lease terms that work in your favor.
Commercial leases are usually drafted by real estate professionals looking out for the interests of the landlord. These leases are also negotiable. Carefully review the following terms:
- Indemnity. Make sure that the indemnity language in your lease is reciprocal so the Landlord is indemnifying you as well.
- Relocation. Moving affects your business. If the landlord wants relocation rights, you should get compensation in exchange.
- Estoppel letters. It’s common practice for tenants to sign estoppel letters to verify facts for lenders. Use this as a bargaining tool.
- Buildout. The leased space isn’t useful if the layout doesn’t suit your business. Don’t sign a lease before you have approval for or finish the buildout.
- Exclusive use. An exclusive use agreement keeps your competition away from your building. Get it in writing that an identical business won’t open next door.
- Parking. Your customers need a place to park. If parking is a premium, this needs to be part of the negotiation.
- Condition of premises. Ask for an inspection and document the condition of the premises before you sign.
- Common area maintenance. Decide who is responsible for maintaining common areas. Your customers deserve clean hallways and restrooms.
You don’t have to agree to terms that solely benefit your landlord. If you’re not sure about how to go about negotiating a lease, call us and put our commercial real estate experience to work for you.