Guide to Negotiating a Commercial Lease

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A commercial lease plays an integral part in the life of any business. Getting the right deal will undoubtedly enhance your business operations in many ways. Business owners looking for retail spaces or rental offices, thus, are expected to negotiate and find a favorable deal for their businesses to succeed.

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Landlords design lease agreements and the terms of the lease will always favor them. Your principal responsibility as a tenant, thus, should be to understand the lease and seek modifications that favor you. Here are some tips to help you find some changes or negotiate the terms of a commercial lease.

Evaluate the Length Of the Lease

Once you have a potential lease agreement in your desk, the first thing you should look for is the duration of the lease. Small businesses, for instance, should be comfortable with one or two years with an option to renew the contract. If you feel that you need a longer lease if you are sure that the location is favorable, you might go for a longer lease.

Examine the Rent

How much rent will you be required to pay? The amount of rent that you will be required to pay is an essential part of any lease agreement. Besides what the landlord expects you to pay, it is imperative to ensure that you can comfortably raise the amount from your business. Part of negotiating your lease agreement should involve curbing potential rent increases when renewing your lease. If you are moving to a new area, you should do some research to know what other similar businesses in that neighborhood are paying.

Look for Hidden Costs

There are two main types of lease agreements – gross lease and net lease. The former is characterized by having all costs added on the rent while the latter means that there could be additional costs besides the rent you pay. As such, you need to understand the terms of payment upfront as this could save you from unnecessary surprises.

Examine the Termination Clause

There are cases where you might be obliged to terminate your lease prematurely. As such, it is essential to look at the termination clause before committing yourself to lease agreement. Negotiate the terms in the termination clause and ensure that you are comfortable with them.local store

Reading and understanding a commercial lease agreement is essential to helping you understand your responsibilities and benefits as a tenant. Make sure you understand the lease agreement offered by the commercial real estate broker to avoid future surprises.