Knowing how to pick a good commercial lease for your business is an important part of its growth, and negotiating one is an even more important aspect of becoming successful. Never forget that real estate lease agreements tend to favor landlords since they usually prepare them. At Fryer and Hansen, we’ll make sure to help you understand your leasing contract while suggesting modifications that will make the document lean in your favor.
Know the Length of the Lease
Locating a piece of commercial real estate that benefits your business can be quite a challenge, especially if you do it on your own. However, once you’ve found a location that you’re content with, make sure that the first thing you negotiate is the length of the lease. For small business owners, a lease of anywhere between one to two years is a good start since it provides enough time to help you decide if you’d like to keep or leave it. If you feel it isn’t a good fit, you’ll be more comfortable that the lease’s length is short compared to one that’s several years longer.
Do Your Research
A commercial lease agreement can help your business depending on the amount you pay. Remember to do your research of the surrounding areas so that you can negotiate a good price. Rent increases can be ugly surprises and part of the negotiating process is specifying what those prices will be so that you won’t fall behind on payments. Keep in mind that a landlord may increase the amount you pay every year, so working out a total beforehand can ensure that you’ll pay an affordable price.
Keep a Lookout for Hidden Costs
Commercial leases come in a variety of shapes and sizes. You may have heard of net leases where there are costs in addition to rent, and then there are gross leases, where everything is included. Almost all commercial leases will make the tenant responsible for ensuring that all maintenance costs and upkeep payments are made. Knowing what the little details are up front will help you negotiate some terms in your favor.
Ask for Clauses
Always think strategically when dealing with commercial leases, especially when your venture is a risky one. For example, you’ll want to include a clause that stipulates you to sublease a space should you close or relocate your business. You can also include a clause that restricts an owner from renting out a nearby space to a competitor or business similar to yours.
There are also co-tenancy clauses that can get you out of a lease if a business you’re reliant on decides to leave. For example, if you own a coffee shop that serves customers of a nearby business, a co-tenancy clause will allow you to break the lease should that business move or close. Make sure to specify to your landlord that he or she is responsible for any improvements needed prior to your moving in. If you can get it in writing, even better.
Our Real Estate Attorneys Can Help You
If you have any questions about commercial leases, make sure to call our real estate lawyers in McAllen. We can oversee your commercial leasing process to ensure that your best interests are kept in mind!