Signing a lease is an important step for any new business owner. Whether you are opening a store, moving into an office space, or renting out facilities for production, at some point, you’re probably going to have to reserve a space for your business. The world of commercial real estate can be complicated. Here are some prime items to consider when signing that lease.
Everything Can Be Negotiated
While these are some good examples of things to be aware of, there are likely many aspects of your lease that can be negotiated. Work with your potential landlord – and, if necessary, an attorney – to make sure you get the best deal for you and your business. Where a residential lease has a fixed term, a commercial lease is often negotiable and can have a longer or shorter term depending on the conditions set. Commercial leases also have fewer legal protections because the consumer laws that apply to residential lease agreements do not cover commercial leases.
Check All Additional Costs To Consider When Renting A Commercial Property
Will you be responsible to provide upkeep, repairs, and more? Be sure to have a clear understanding of all the costs related to the lease. The most important consideration in a commercial lease is the rent structure. By determining how much you pay per month, as well as how much your rent will increase each year, you can better determine budgets and get a full understanding of whether you can stay in business in this new space. Generally, the average rent increase is around 3% annually. Will your landlord require you to prepay an estimated amount for CAM expenses each month? CAM stands for common area maintenance and is usually interchangeable with the term operating expenses. This would include the common area maintenance, charges for cleaning up common areas, security for the property, property taxes, property insurance, repairs, and maintenance. And then there are taxes and insurance. It is important to stay informed on rate increases and to have a good understanding of coverage limits and options. Your commercial attorney will help you acquire the best possible terms from a potential landlord. You aren’t expected to understand the market data, the relationships of other tenants, or every term used in a lease. That is the job of your attorney. Chances are you might not be 100% clear on what it is you need in a lease. With acute attention to detail, your attorney will protect you in the event that terms are conveniently left out of the written lease. You may not notice this on your own. This is a common pitfall of negotiating terms without an attorney.
Have Open Lines Of Communication With Your Landlord
Communication is key, as they say, and this is nowhere more apparent than in the landlord/tenant relationship. With the extra stress everyone is facing these days, the slightest communication misstep can sour a once amicable relationship between renters, property managers, and the landlords they represent. However, if all parties are conscious of how they communicate with each other, misunderstandings can often be avoided. Even if the location is right and the price is within your budget, it makes sense to ensure that you have clear communication with your prospective landlord, so you can ensure that all terms are properly addressed, whether it is one on one or with your real estate attorney. The attorney can provide you with the support you need to cut through red tape and clearly understand the terms of the lease agreement.
Estevez Law Group Are Commercial Real Estate Law Experts
We handle all aspects of commercial real estate transactions. We provide you with effective, skillful service in writing, negotiating and reviewing contracts, leases and sales documents. Our firm has experience assisting businesses with all types of contracts and agreements. We draw upon our knowledge of Florida real estate law, land use law, and contract law to find optimal solutions for our clients.
> Learn More
Having an experienced real estate attorney from your area oversee your commercial lease ensures that all of the terms in your lease are correct and that all bases are covered in terms of protecting your legal rights and interest.
About Estevez Law Group, P.A.
Helping clients with real estate, commercial real estate transactions, residential property purchases and sales, estate planning, and more! Skillful legal representation can simplify complex real estate transactions and solve problems that frustrate all parties involved. At the Estevez Law Group, P.A. our boutique real estate law firm and title agency assists clients with all types of residential and commercial property matters.
> Learn More