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Missing the fine print in a commercial lease could be costly

| Jun 17, 2020 | Commercial Real Estate |

Orange County retail business owners may be anxious to get into the rental space they have chosen before someone else snaps it up. Premium locations can be a challenge to find, so getting through the commercial lease process quickly is often a goal. However, that could be a mistake since the fine print could contain hidden costs that will drive up the price of rent and possibly jeopardize a business’s success.

Commercial tenants could end up paying for extra square footage that they are unable to use, and the landlord knows it. For instance, should a tenant pay for the space occupied by an elevator shaft? Most renters would agree that should not be the case. When reviewing and negotiating the lease, it would be a good idea to question the landlord regarding how he or she calculated the square footage.

Will the tenant improvement allowance be enough? Before agreeing to any number the property owner gives regarding improvements needed to the space, it would be beneficial to get some estimates regarding the total cost of the work needed. After knowing how much the actual costs will be, the amount of the allowance can be better negotiated.

The above are just two of the considerations that a potential tenant may want to look into before signing a commercial lease. Other issues such as administrative fees, rent increases and capital improvements may also contain language that could end up costing a tenant over the course of the lease. Instead of being in a hurry, an Orange County business owner would most likely fare better in the future by taking the time to thoroughly review the agreement with an attorney before signing anything.