The Best Advice About Leases I’ve Ever Written

How To Effectively Negotiate a Commercial Lease Although anyone can represent themselves in negotiating for a commercial lease, the fact remains that the most efficient and guaranteed way to get a favorable set of terms is by bringing with you a team of experts or legal professionals. 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. In this regard, there actually are three indispensable steps you need to take, which are searching and choosing the ideal commercial space to rent, completing the rental application, and finally applying for the real estate lease. Once all of those three are finished, you then will be receiving the forms for your lease. For small-sized business, it makes sense to stick to one or a couple of years with an option for renewal.
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Once you’re settled with the length of the lease, the next thing you should be focusing on is the price of the rent. While it does takes time and tons of effort to get the best rate, you will want to sweat it out if you want to negotiate for 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. This is to make sure there will be no surprises of an increase in the rent moving forward.
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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 means all costs are already included in the agreed upon price. 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. The traditional costs that are typically not included in the initial negotiations is related to maintenance of the space or area. Know that even though you are most likely going to be responsible for the maintenance of the space, you still deserve to be informed about it during the negotiation process. To cap it off, put in the effort to read the commercial lease several times and make sure you understand every word in it right before agreeing and signing.