For many businesses, their lease is one of their most important concerns. The location of a business affects almost all aspects of the business. It can’t be too expensive, but, you want to have a great space. You don’t want it too big, but, you want to be able to expand if needed. You get the point. A commercial lease is a business matter and should be handled by the manager or owner with a lawyer reviewing the lease.
One of the most important aspects in leasing is to thoroughly review the conditions in the lease. The Landlord will present you with a lease to sign. Make sure you and your lawyer review all the conditions and terms before the lease is signed.
When you start reviewing areas for a lease there are some important mater to consider. The term of the lease should be reviewed in detail. Long term leases allow you to set a rent amount for that time with no increase. However, if the company needs a larger space or goes out-of-business, you are stuck with that location and the rent until the lease is up. Short term leases gives you the freedom to move or expand in a shorter amount of time, but, you rent can be raised when you renew your lease. Commercial leases are normally from three to five years and have options to extend the lease.
The right to renew is the option to extend the lease after it has run out. Some leases do not have this right and have no protection for the leasee after the lease is complete. If you do not have the right to renew, the landlord could tell you to leave after your lease is up. With a right to renew clause you may also have to inform the landlord six months to a year before you want to renew or extend the lease. If you do not give the notice in the allotted time the lease will expire and you could be looking for a new location.
Most commercial leases are priced by square foot. This might seem simple; however it can get quite confusing. You need to ask how exactly the square foot is calculated. Many companies measure the square footage based on the outside of the building. In buildings with multiple tenants, it is common practice to divide up the common areas and add it to the square footage. This can include: bathrooms, lobbies, elevators, hallways, heating and air-conditioning closets, janitorial rooms and stairwells.
Another aspect of leases many companies don’t know about is hidden fees. Many leases add janitorial expenses, maintenance, taxes, insurance and operating expenses as small fees attached to the rent. All these should be mentioned in the lease and can be contested if not mentioned in the lease agreement.
For the best leasing scenario, go over every line of the lease with a fine tooth comb and ask the landlord about any issues or aspects you don’t understand.
Comments
No comments.
Add your comment