Everything You Need to Know Before You Start Leasing a Commercial Property
Posted on December 17, 2018 by Genet Group
Before committing to leasing commercial space, consider all the possible roadblocks you may encounter. Don’t sign on the dotted line without asking yourself a few questions about the kind of lease you’re getting involved in. Of course, there are several more, but starting with these essentials will put you on the right track.
Have I Read and Understood Everything?
Although it may seem a bit redundant to say, reading over every paper in the packet is crucial. Most landlords may use general terms and conditions, but if you have specified specific negotiations, you need to make sure they’re accounted for within the documents. Keep an eye out for any contradictions within the contract that could negate what you’ve tried to negotiate.
Do I Understand the Terminology?
If you haven’t acquired a lawyer to look through the documents for you, be sure to understand exactly what you’re reading through. The Common Area Maintenance portion of the papers is one of the most confusing, and without the proper knowledge, could have you in a whirlwind. Be sure to note that the percentage of which you pay the CAM is based on the size of the building rather than how much of the building is being rented.
Is My Lease Assignable? Can I Obtain a Sub Lessee?
If you sell the business and are looking for someone else to take over the lease, then be sure to clear the air before the landlord terminates your contract. Typically, it would be another business working in your leased space under your terms. Although you will pay the lease, the lessee will pay a portion to help out with the costs. If you haven’t discussed it with your landlord but are looking to make that decision in the future, speak to your landlord to attempt negotiating those terms.
Does the Lease Have an Arbitration Clause?
This piece of the lease states that any disputes between parties will be settled in arbitration versus litigation. Most landlords will insert this clause for some reasons. It is much more cost effective to resolve issues arbitrarily rather than with lawsuits and to pay hourly for a lawyer. Although there are pros and cons to both sides, consider which option will work best for you long-term.
With over 20 years of real estate experience in South Florida, Genet Group knows how to negotiate, so everyone wins. Our goal is to ensure that our clients are receiving the best possible agreement for their business to succeed. We instill a hands-on management approach to how we conduct business, that’s what has kept us as one of the leading property groups in South Florida. If you are in the surrounding area and are looking for expert property managers, give us a call at (954) 572-9159.
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