Signing a commercial lease is a major commitment. The location you choose and the facilities available will dictate everything from customer traffic to your business to growth limitations if the company succeeds.
As with any other kind of business contract, it is important to adequately protect yourself before you make some kind of legal or financial commitment to a property. There are three ways to minimize the risk you incur by signing a commercial lease.
Have someone help you decode the language
Commercial leases often include more technical jargon than residential leases and could include pages of fine print. You should never assume that you understand the details of the lease without first reviewing it with a professional.
You may discover that the terms are different than what you expected. You may need to locate to a different rental space or counter the terms in the document with a solution that works for your business.
Ask for the protections that matter to your business
Are you starting a company and recognize that there’s a risk? You might want to ask the landlord to deviate from the standard three-to-five-year commercial lease and allow you to sign only a one-year lease.
Do you worry about circumstances outside of your control, like a possible war in a country that supplies necessary materials for your business? Adding a force majeure clause could protect your company from needing to pay rent even after you have to cease operations due to circumstances beyond your control. Thinking about the risks your company has can make it easier for you to negotiate better terms in the lease.
Clarify maintenance responsibilities and expenses
Commercial landlords usually either pass the responsibility for maintenance to their tenants or the financial costs of all common areas, including bathrooms and parking lot. Sometimes, tenants don’t understand how much they may have to pay in fees or in upkeep for the facility.
Making sure that the lease explicitly includes information about who is responsible for various systems or maintenance requirements can help prevent conflict and additional, unpredictable expenses.
Negotiating before you sign a commercial lease can help protect your business during what could be a long-term financial commitment.