For some businesses, having physical locations that are open to the public are necessary for success. Buying a commercial property outright can be vastly expensive, which is why many business owners opt for commercial leases instead.
A commercial lease can benefit both the business owner and the landlord. The business owner gets use of a building for commercial activities without the added property expenses while the landlord takes in a regular income from rent.
However, negotiating a good commercial lease often requires the help of legal counsel. Outlined below are a few important factors to consider with your business attorney.
Does the property match the business needs?
Anticipating the growth of your business is pivotal when negotiating a commercial lease. Is the property a short term fix or a long term solution? Can this be factored into the price?
Are there any legal restrictions on the business activities that can be conducted on the property? For instance, the industry you are in may require special permits or there may be zoning restrictions at that location. Sometimes rental agents don’t even realize the extent of the restrictions.
Who is responsible for repairs?
The party responsible for repairs on leased space and common areas should be clarified in the commercial lease agreement. What happens if another tenant causes damage to your leased area? If the building is older, who is responsible to regular maintenance and repairs caused by age? Is there any deferred maintenance or a fund set aside for upcoming maintenance? If upgrades or repairs are scheduled in the future, will you have to cease production for a sustained period while the repairs are carried out?
Are you shielded from personal liability?
The commercial world can be unpredictable and there are no guarantees of success. What happens if you can’t keep up with rent payments? Are you going to be held personally liable for missed rent payments and cancellation fees?
The most important step to take when negotiating a commercial lease is seeking legal guidance. We help business owners with commercial lease negotiations, feel free to contact us for a consultation.