You have done your due diligence, studied the traffic patterns in the area where you want to open your new business or location, and you have found a commercial property that seems perfect for your needs. You may feel it is time to put your signature on the lease and move forward with your plans.
However, keep in mind that signing a lease commits you to the property, perhaps for years. Are you ready for that? Before taking the plunge, there may be a few more things to know about the terms of your lease and the expectations of your landlord.
Get ready to negotiate
You may be willing to overlook a few flaws in the unit if the rest of the property is a good fit. Besides, you may have plans to change the space to better suit the needs of your business. However, what does your lease say about customizing your unit? Can you install cabinets, change the flooring or add cubicles? Who pays for these expenses, and will you have to restore the unit to its original condition when your lease is up?
These are just a few questions you should ask before signing. Other questions include the following:
- Besides use of the unit, what does your rent include, such as utilities, taxes, insurance or maintenance on common areas?
- What are the projected costs of any additional expenses, and will your landlord be willing to negotiate those costs?
- How long a commitment does the lease involve, and what are the terms for renewal and non-renewal?
- What kind of insurance should you carry for the unit, and what is the value of the property you must cover?
- What are the terms for breaking the lease, and what penalties might you be responsible for if this happens?
- Does the lease allow you to sublet or transfer your unit in lieu of breaking the lease?
Many if not all of these and other terms are negotiable. For example, you may be able to convince the landlord to add a clause granting you the right to sublet, and you will certainly want to discuss who will ultimately own any improvements you make on the property. As eager as you may be to accept the lease and open for business, taking the extra time to review your options may benefit you in the long run.