Securing a commercial lease that suits your needs can be a complex and involving affair. Unlike residential leases, renting a commercial space needs thorough research on the available spaces, terms and conditions, price and amenities, keeping in mind that few consumer protection laws exists to fall back on. Negotiate a lease that you can live with for at least three years because it is expensive to break the agreement once finalized.
Identify Your Requirements
Decide on the type of space you want and narrow down the location before beginning your search. Many types of commercial spaces exist such as business parks, industrial parks, retail spaces and office buildings. The rental terms and restrictions on use vary depending on the type of space. Choose a commercial space depending on the business you’ll be carrying out. For example, while business parks offer comparatively lower rent, they are not usually in ideal locations for retail.
Learn Lease Terminology
Commercial leases usually include complex terminology that you need to familiarize yourself with to understand their import. If unsure, ask about the meaning of a term before agreeing to its inclusion in the contract.
Inquire About Facilities
Commercial spaces ordinarily offer a number of facilities to tenants including parking, routine maintenance, retrofitting or free rent for an initial period. Inquire about the availability of these options before settling on a space to rent.
Examine the Lease
There is no standard format for commercial leases. Each contains a variety of terms and conditions depending on your negotiations with the landlord. Carefully read through every clause to ascertain that you are comfortable with the implications before you sign. Key clauses dealing with rental price, mode of payment and increments, utility, maintenance and insurance costs, lease term, termination, default and renewal of lease require special attention. When in doubt, consult a real estate attorney.
Negotiate Better Terms
Propose terms such as an exclusivity clause if you are renting space in a mall. It is usually helpful to have leases from other potential spaces you are viewing for comparison's sake and to strengthen your negotiating position. Once you have come to an agreement, have the landlord write in the amendments. Examine the final lease again before signing. If you cannot come to an agreement, keep on searching until you find the space and landlord that is right for you.
- Nolo: The Commercial Lease-What You Should Know
- Hickock and Boardman Realty: Leasing Commercial Property-Frequently Asked Questions
- Small Business Administration: 6 Tips For Negotiating a Commercial Property Lease Without Getting Burned
- Entrepreneur: How to Negotiate a Lease-A Beginner’s Guide For Retailers
William Dailey is well-versed on local and international aﬀairs with sound financial, economic and business knowledge. He is an MBA and Business Administration graduate from the Kingston University and The London School of Business and Finance, respectively. William has been writing professionally since 2011.