Finding a new office space for your business can be exciting and is also an indication of growth, but it’s important not to get carried away and to consider various factors prior to signing on the dotted line. Taking the time to understand lease terms and how they’ll impact you will also help you negotiate the best deal possible. Here’s everything you should keep in mind prior to solidifying your lease agreement.
1. Make sure you’ve read your lease agreement and understand it
A lease agreement can be long and uninteresting, but it’s still key to read over it a few times to make sure you understand it. While reading your lease, look out for any terms you may not be familiar with or anything that you may not have agreed to. It’s in your best interest to understand when your lease starts and ends, the rent terms, obligations for the landlord and tenant, and termination.
You can also enlist a lawyer for professional help if you’re unsure of what the terms in your lease mean.
2. There’s always room for negotiation
You don’t have to sign the lease immediately when you receive it. If there are any terms you don’t agree with, you should negotiate them with the landlord. Start by writing a list of everything you’d like to be changed in the lease and then send it to the landlord.
3. Location, location, location
The location the commercial property is located in is important to consider. Some brick-and-mortar businesses rely on foot traffic to drive sales, so in searching for the ideal commercial property, they’d have to find a busy location. Things like walkability, public transport, safety and security, and amenities are also key factors to consider regarding the location of a commercial property.
4. The cost of rent
The cost of occupancy that was advertised prior to viewing the property and receiving the lease isn’t reflective of the total amount you’ll be paying. The full cost of occupancy includes the rent plus CAM fees, parking fees, utilities, levies, and more.
Ask the landlord to send you an estimate so you have a clearer indication of how much you’ll be paying in total.
5. Have an understanding of the CAM terms
Common area maintenance (CAM) fees are fees paid by tenants to landlords to upkeep the common areas in the commercial property. Understanding how CAM fees are calculated will help with not being overcharged or being charged for costs that you shouldn’t be paying for as a tenant.
6. Find out if the lease is assignable and if a sublessee is allowed
Business can be unpredictable. In the event you sell your business, make sure that the lease is assignable (this gives someone else the right to take on your lease). You should also ensure that the landlord doesn’t have the right to terminate the lease in the event of an assignment, as this could negatively affect the sale of your business.
A sublessee would work in your space and pay towards your lease, which can be a great way to save money. Much like the provision listed above, make sure having a sublessee is in your contract should you want to share your space in the near future.
By considering the facts above, you’ll be able to make an informed decision prior to signing a commercial property lease. To find the ideal building to lease, make sure you use reputable property websites to prevent any unscrupulous dealings. Kazler.com offers a variety of industrial, office, and retail listings for business owners looking for a new location.