Starting a new business is an exciting adventure. It can also feel overwhelming. There are a number of new and unfamiliar obstacles that emerging business owners have to tackle for the first time.
One of the biggest is finding a space for your business to operate and entering into a commercial lease agreement. Most people are only familiar with residential leases. Unfortunately, having signed a residential lease does little to prepare you for dealing with a commercial lease. Thankfully, you don’t have to go it alone. At The Law StoreTM, we’re here to help take the guesswork out of commercial leasing agreements.
What You Need to Know About Commercial Lease Agreements
Most businesses opt to rent rather than buy property, because it requires a smaller infusion of capital. Particularly for budding businesses, there isn’t always a lot of extra money to go around while you’re trying to build your brand. However, renting is not without its complications.
Commercial leases are much more complex than residential leases. This is due, in large part, to the fact that commercial lease terms are negotiable and vary widely from lease to lease. Because every business has different needs, the lease terms need to be altered to reflect this (unlike residential leases, which tend to offer standard terms).
Commercial leases also typically provide fewer legal protections to tenants. Because business people are presumed to be knowledgeable, there are few consumer laws designed to protect them. In most cases, commercial leases are also longer than residential leases and can last for several years.
Because the terms of a commercial lease are negotiable, it’s important to pay extra attention to the most crucial provisions of the lease to make sure that you understand what you’re agreeing to. These include:
- The legal description of the property being leased
- The length of the lease
- The rent amount
- Grounds for any rent increases
- Responsibility for utilities
- Security deposit requirements and conditions
- The impact of making improvements
- Zoning ordinances and limitations on signage\
- Exclusivity clauses regarding renting to competitors
- The ability to sublet
This list is far from exhaustive. Depending on the nature of your business, there may be other lease terms that are crucial to the operation of your company. The time to address these issues is before you sign the lease.
Your physical premises can have a huge impact on the success of your business. It’s important to weigh your options before rushing into any property decisions. Make sure you are comfortable with all of the terms of your lease, and don’t be afraid to negotiate. It’s your livelihood at stake; don’t settle for anything less than what you need.
Our Small Business Attorneys Are Here to Help
There are a lot of things to consider when it comes to growing your business. Expanding into commercial space is a big step, and one that can play a huge role in whether your business succeeds.
The experienced business attorneys at The Law Store are here to help ensure that you enter into the lease that is right for you. Our Free First AdviceTM program allows you to meet with one of our attorneys free of charge to discuss any questions you might have about commercial lease agreements. Book an appointment today by dropping by The Law Store, calling us, or scheduling a service online.