[vc_row][vc_column][vc_column_text font_color=”#000000″]Renting a commercial space is a huge responsibility — in reality the success of your business may ride on certain terms in your lease. Before approaching a landlord, there are certain things that you should understand with how commercial leases differ from residential leases. Before you sign, make sure you understand and agree with all basic terms of the lease, such as rent amount, length of lease and the configuration of the physical space.
HOW DO COMMERCIAL LEASES DIFFER FROM RESIDENTIAL LEASES?
It is extremely crucial to understand from the get-go that residential and commercial leases are EXTREMELY different. Here are the main distinctions between them:
– FEWER CONSUMER PROTECTION LAWS- commercial leases are not subject to most consumer protection laws that govern residential leases — for example, there are no caps on security deposits or rules protecting a tenant’s privacy.
– NO STANDARD FORMS – Many commercial leases are not based on a standard form or agreement; each commercial lease is customized to the landlord’s needs.
– LONG-TERM BINDING- you cannot easily break or change a commercial lease. It is a legally binding contract, and a good deal of money is usually at steak.
– NEGOTIABILITY AND FLEXIBILITY- Commercial leases are generally subject to much more negotiation between the business owners and landlord, since businesses often need special features in their spaces, and landlords are often eager for tenants.
MAKE SURE THE LEASE WILL FIT YOUR BUSINESS
Before you sign a lease agreement, you should carefully investigate its terms to make sure the lease meets your business’s needs.
First, consider the amount of rent — make sure you can afford it — and the length of the lease. You probably don’t want to tie yourself to a five- or ten-year lease if you can help it; your business may grow faster than you expect, or the location might not work out for you. A short-term lease with renewal options is usually safer.
Also think about the physical space. If your business requires modifications to the existing space — for example, adding cubicles, raising a loading dock, or rewiring for better communications — make sure that you (or the landlord) will be able to make the necessary changes.
Other, less conspicuous items spelled out in the lease may be just as crucial to your business’s success. For instance, if you expect your camera repair business to depend largely on walk-in customers, be sure that your lease gives you the right to put up a sign that’s visible from the street. Or, if you are counting on being the only sandwich shop inside a new commercial complex, make sure your lease prevents the landlord from leasing space to a competitor.
Here are a few things you should take into consideration when looking for an office space for your business:
– the length of lease (also called the lease term), when it begins and whether there are renewal options;
– rent, including allowable increases (also called escalations) and how they will be computed whether the rent you pay includes insurance, property taxes, and maintenance costs (called a gross lease); or whether you will be charged for these items separately (called a net lease) , and importantly any rent structures in the event rent cannot be paid;
– the security deposit and conditions for its return;
– exactly what space you are renting (including common areas such as hallways, rest rooms, and elevators) and how the landlord measures the space (some measurement practices include the thickness of the walls);
– whether there will be improvements, modifications (called build outs when new space is being finished to your specifications), or fixtures added to the space; who will pay for them, and who will own them after the lease ends (generally, the landlord does); and
– specifications for signs, including where you may put them.
AMERICAN WITH DISABILITIES ACT
The Americans with Disabilities Act (ADA) requires all businesses that are open to the public or that employ more than 15 people to have premises that are accessible to disabled people. Make sure that you and your landlord are in agreement about who will pay for any needed modifications, such as adding a ramp or widening doorways to accommodate wheelchairs.
Of course, there are plenty of more, so if you have any questions on the ones above or any others that were not mentioned… click on the contact us tab! We are more than happy to help! Let’s get strong together![/vc_column_text][/vc_column][/vc_row]