The seriousness of an investment is relative to the wealth of the person or entity making the investment. A $10,000 investment by a small business owner in a strip mall might be just as serious as a $10 million investment by a large corporation if it represents a huge percentage of the investor’s available capital. For this reason, when it comes to a business venture that requires a physical place of business housed in a leased piece of property, it is vital that the business owner negotiate the terms of the lease with a fine-toothed comb. Being certain of every aspect of a business lease will ensure that problems to do no rear their ugly heads later on down the road in the form of a landlord/tenant disagreement or lease dispute.
Here are a few things that business owners can do to stay on top of the details of their lease agreement before inking the deal: 1) have the landlord explain all of the terms of the lease, one by one, even if they seem clear; 2) be sure to renegotiate any terms of the lease that need to be addressed; 3) ask for a clause that prevents the landlord from operating a competing business; 4) double check that the terms of the lease correspond with the terms outlined in the letter of intent; and 5) review the proposed letter of intent early.
Although most small business entrepreneurs are the do-it-yourself-at-all-costs types who are often very capable of negotiating lease terms and other contractual arrangements, California small business owners might consider having a qualified landlord/tenant attorney review the terms of their lease arrangements before signing. This can help avoid numerous problems that could surface later as a result of simple oversight that can happen due to inexperience.