Top Things to Consider In Commercial Lease Negotiations
As much as you hate to admit it, there really is no better way of getting the most favorable lease terms than getting legal advice and representation during the negotiations. Don’t forget that choosing the right commercial lease isn’t the same and as simple to that of renting a residential property since you’re dealing with something that needs to provide help for your business to succeed.
However, you probably are esteemed enough to do the negotiating on your own, but it doesn’t mean we’re just going to let you do that without arming yourself with some tips on how to guarantee that the lease contract terms are in your favor.
First of all, be sure you evaluate the length of the lease based on what you agreed upon verbally and what’s written in the draft of the contract. There actually are several things you need to do at this juncture, including locating the ideal commercial rental space, filing the rental application, and applying for the lease. Once all of those three are finished, you then will be receiving the forms for your lease. For small-sized business, it makes sense to stick to one or a couple of years with an option for renewal.
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The moment you’re done weighing over your length of the lease options, it’s time to think about the price. Although it will require a lot of time and effort, you definitely are going to explore your options in order to get a fair price. Keep in mind that there’s no way for you to be successful in the negotiating table if you haven’t done enough research on other possible commercial spaces to rent. Additionally, you also have to tackle the issue of renewal options, more particularly on the aspect and possibility of rent increases. This is to make sure there will be no surprises of an increase in the rent moving forward.
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Lastly, you should be vigilant enough not to get deceived by hidden costs. You should know by now that commercial leases can be described in two forms: a gross lease and a net lease. The former includes all the costs in the entire lease. The latter on the other hand suggests that aside from it, there are additional costs to be charged to you aside from the rent. Although you might find it outrageous and deceiving, a net lease is actually a very common practice in many commercial leases today. For the most part, the costs that are not included in the negotiations are those related to the maintenance of the commercial property or space. Even though you as the tenant will be responsible for maintenance costs, you still will want to get the details straight on it or else you’ll be surprised at how much you’re spending for those additional maintenance expenses.
Once you’re settled with all those issues above, make it a point to read the commercial lease at least a couple of times before you agree and sign it.