Commercial leases are complex legal agreements, and the two parties should carefully consider the terms of these contracts before signing. As the terms for these agreements typically last for months or years, it’s critical to avoid possible missteps that could cost both time and money. If you are a tenant considering a lease agreement, you will benefit from knowing what you can expect from the property owner and how to recognize potential issues.
Most landlords have a lease agreement they offer to tenants, but as you would expect, these tend to be heavily skewed in the favor of the property owner. You will be negotiating previously drafted terms that may not be in your interests. Before you sign any type of contract, understanding the issues to look for and how to negotiate beneficial terms is critical to your long-term interests as a commercial tenant.
Consider these things
In your consideration of a commercial space or during the negotiations of terms, it is easy to focus on the obvious. For example, the look of the building, the location and the rent amount are all major issues you will want to take into consideration, but you will find it beneficial not to overlook the following as well:
- Condition of the premises and whether it’s appropriate for your intended use
- Current zoning designation and if it is suitable for your commercial needs
- Adherence to laws and regulations, such as ADA compliance
- Operating expenses and costs of occupying that specific space
- Maintenance and repairs needed and financial responsibility for these things
- Potential need for subleasing and whether the lease agreement allows it
- Safety of the premises and location, and amount of security provided by landlord
These are issues that are easy to overlook, but they can lead to serious complications in the event that there is a problem at some point after signing the contract. It may help to remember to consider these details and others before agreeing to the terms of a lease.
Protecting your interests
As a commercial tenant, it is critical that the terms of your lease agreement make sense for your California company and the nature of your operations. If you have found a commercial property that will work for your business, it is prudent to seek an understanding of how you can secure beneficial terms in your lease agreement before you move forward.