The success of your business may depend on the commercial lease you sign. If you do not understand the hidden costs that may come with your lease, it could prove costly in the future and derail your business financial plans
Here are four big things to consider before committing to a long-term lease:
1. Do you fully understand the terms of the lease?
A common mistake many business owners make is signing a lease agreement without understanding what they are getting themselves into. As such, you need to go through every term of your lease carefully. The devil is in the detail, and any overlooked clause can significantly impact the terms of the lease agreement.
2. Is it the best deal you can get?
Many people don’t know that they can negotiate the terms of a lease right from the rent. Therefore you need to ensure that you get the best deal on the table. Have an eye on the future and work out an agreeable plan with the landlord regarding any expected increases in rent or other expenses related to the lease. Consider other aspects of your deal, including use and exclusive-use clauses, the right to sublease and other perks you may want.
3. Who is responsible for maintenance and repair?
Every lease is different. You need to know what maintenance and repair charges are the landlord’s responsibility, and what belongs to the tenants. If you are one of several tenants, you need to know how your share of any repairs will be calculated. You also need to know about payment terms and anything else that could affect your monthly costs.
What happens in the event of a dispute?
The lease should provide direction in case of a disagreement between you and the landlord. Ensure you agree with the arrangement in case of a dispute to prevent costly and time-consuming litigation.
Finally, given that a lease is legally binding, you need to be aware of your options if you need to get out of one, either because of your business needs or irreconcilable differences with your landlord. Staying a step ahead in anticipation is important for your business and overall peace of mind.