Commercial Space for Lease: Ensuring You Get the Right One
Renting commercial space is a huge responsibility. In fact, your business’ success or failure may ride on some terms of the lease. Before you talk to a landlord, you must understand how retail spaces for lease differ from residential leases. Also, before you sign anything, ensure you understand and agree with the basic terms of the lease like the amount of rent, the configuration of the space, and the length of the lease.
Commercial Leases vs Residential Leases
You need to understand that legally speaking, commercial and residential leases are quite different. Here’s how:
- Fewer consumer protection laws. A commercial lease is not subject to the majority of consumer protection laws that govern residential leases. There is no rule that protects the privacy of a tenant.
- Long-term and binding. A commercial lease cannot easily be broken or changed. This legally binding contract often involves a great deal of money.
- Flexibility. In general, a commercial lease is subject to more negotiation between the business owners and the landlord. Usually, businesses need special features in their spaces and space owners are often eager for tenants and want to extend special offers.
- No standard agreements. A lot of commercial leases aren’t based on a standard form or agreement. Every commercial lease is customized to the needs of the landlord.
How to Ensure the Lease will Fit your Business
Before signing a lease agreement, carefully investigate its terms to ensure the lease meets the need of your business. Consider if you can afford the amount of rent and the length of the lease. Also, take into consideration the physical space. Does your business require modifications to the existing space? If so, ensure that you can make the necessary changes.
Furthermore, other less obvious items stipulated in the lease may just as vital to the success of your business. For example, if you expect your cellphone repair business to rely largely on walk-in customers, ensure your lease provides you with the right to put up a sign that is visible from the street.
Negotiating a Commercial Lease
Negotiating favorable lease terms is a complicated task for a lot of small business owners and managers. But, as a possible tenant, you must read the lease agreement completely, understand what it says, and ask for modifications that will favor you. To increase your negotiating power, assess the length of the lease, research comparable rents, and look for hidden costs.