Learning The Secrets About Leases

By | January 27, 2017

How To Effectively Negotiate a Commercial Lease While it may be a stretch to anyone’s budget, there’s no denying that hiring legal experts or business professionals during the negotiation process for a commercial lease is the best and most proven way of getting the most favorable terms. First things first, the decisions you make in terms of choosing a commercial space to lease is never as simple as that of the one you make when renting a house, property, or apartment, since it involves your business and the possibility of it making money or becoming stagnant. However, you probably are esteemed enough to do the negotiating on your own, but it doesn’t mean we’re just going to let you do that without arming yourself with some tips on how to guarantee that the lease contract terms are in your favor. First, scrutinize the length of the lease as written in the proposed contract. There actually are several things you need to do at this juncture, including locating the ideal commercial rental space, filing the rental application, and applying for the lease. The moment those steps are done, you will then receive the forms for your lease. A one or two-year contract is good enough for small-sized businesses, but it makes sense to have an option to renew thrown in.
The Key Elements of Great Negotiations
After thoroughly thinking over the length of the lease, the next concern is if you’re getting a reasonable rent price. Although it will require a lot of time and effort, you definitely are going to explore your options in order to get a fair price. Bear in mind that there’s no way for you to negotiate for a fair price if you don’t even have numbers to compare. Also, don’t forget to include in your discussion the renewal options, particularly on the issue of rent increases. The purpose of this is for you to be prepared enough and not be surprised should there be some kind of rent increase you didn’t know while moving forward.
What Do You Know About Franchises
Lastly, be wary of the possible hidden costs that will catch you offguard. You should know by now that commercial leases can be described in two forms: a gross lease and a net lease. The former includes all the costs in the entire lease. The latter on the other hand means that there are other costs aside from the rent. Though a net lease is quite unfavorable to you, it actually is a very popular practice in commercial leases these days. For the most part, the costs that are not included in the negotiations are those related to the maintenance of the commercial property or space. Though it really becomes the responsibility of the tenant to cover maintenance costs, it doesn’t mean it needs to be hidden from you during the negotiation process. Once you’re settled with all those issues above, make it a point to read the commercial lease at least a couple of times before you agree and sign it.