Whether they feel under pressure to sign quickly due to a competitive market or are relieved to finally find the perfect location after a long search, too many business owners fail to carefully examine the agreement prior to signing a commercial lease. Unfortunately, this eagerness can lead to errors in judgment and potentially result in further trouble down the line.
While every situation is unique, there are numerous mistakes an individual can make when facing a commercial lease agreement. Often, these errors are common across many scenarios.
- Negotiate key terms: While many people focus on the amount of rent to be paid and do not negotiate further, it is wise to at least discuss various terms with the building’s management team. From the length of the lease and rent reviews to renewal options and the ability to sub-lease, it is crucial that a business owner not simply sign a lease without negotiating a more beneficial arrangement.
- Full property inspection: Prior to signing the lease agreement, it is wise to get to know the property. Whether it is visiting other floors in the building or other buildings on the property, do not hesitate to seek admittance to these areas. This is important as a means to investigate and ensure the buildings, maintenance and improvements are compliant with local, state and federal requirements.
- Identify any potential upgrades: It is not uncommon for the lease to be singularly beneficial for the property owner and require the business owner to be responsible for any upgrades. While all leases are unique, it is important to inspect crucial elements such as HVAC, plumbing and wiring to ensure they meet your needs. If they do not, negotiate who bears the responsibility for the necessary upgrades.
Whether this is your first commercial lease agreement or your fifth, it is wise to seek the guidance of an experienced attorney. A lawyer can help draft, review or negotiate terms of any type of business contract.