Thinking about signing a commercial lease for your business? You might think, "What do I really need to know?"
Well, it's simple. Commercial lease agreements are deals you can shape to fit your company's needs. In this article, we'll explain these contracts in easy terms, show you what to look for, and give tips on making the best deal for your business.
Understanding the Components of a Lease
A commercial lease binds the landlord and tenant to rent business space. Below are the components you need to know.
Parties to the Lease
A lease should clearly state the legal names of the landlord and tenant. Proper parties accept their lease obligations under this arrangement.
Premises Clause
A premises clause details the commercial rental property, noting the address and square footage. It specifies the tenant's exact commercial space they can use.
Use Clause
The use clause specifies the permitted uses of the property. Essential for limiting tenant activities to only those authorized.
Term Clause
A term clause sets out the length of the lease. Both parties need to understand the duration of their contractual obligations.
Rent Payment
This section details the base rent and any extra for maintenance or utility charges. The tenant needs to understand their total financial commitment.
Security Deposit
A security deposit is an agreed-upon amount set aside by the tenant in case of default or damage. It provides financial security for the landlord.
Alterations and Improvements
This clause details who handles any modifications to the space and who will bear the cost. It's a must for managing changes to the property during the lease term.
Tips on How to Negotiate
Negotiations can feel like a tricky slope. That said, if you come in with prior knowledge, it's not so hard. Consider the below points to guide you.
Evaluate Your Business Needs
You must assess your current and future space needs, budget, and ideal location. That way, you can identify the most suitable properties.
Research Comparable Rents
Knowing the market rate for similar properties can help you negotiate a fair price. It's a crucial step in ensuring you don't overpay.
Understand Your Costs
Be aware of all costs, including rent, utilities, maintenance, and extra fees. It can prevent unexpected expenses and help you budget accurately.
Ask for Favorable Clauses
Request changes to the lease that will benefit your business. These favorable terms can impact how your business stands out.
Check the Termination Clause
You must know the conditions and drawbacks of ending or transferring a lease. If you don't, you might face unexpected penalties or difficulties.
Involve a Lawyer
Legal professionals are an often overlooked aspect of the lease process. With their help, they can spot possible issues relating to your specific needs.
Tackle Your Commercial Lease Agreements
At PMI Prime Property Services, you get the professionalism you deserve. And commercial lease agreements are no different.
We have been in the game for over 20 years and have experience from all over. We offer property, association, commercial, and short-term management services in Morristown, New Jersey.
Getting the most profits from your investments is our biggest aim. Do you have further questions or want to take the next step? If so, contact us, and we'll be glad to help!
