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Commercial leases are agreements between a tenant and landlord in which the tenant agrees to rent a commercial property from the landlord for a set amount of time. These leases can be for office buildings, retail stores, restaurants, or other types of commercial lease properties.
Before signing a commercial lease, there are several key details to consider, which will require extensive research. Choosing commercial lease properties is not an easy task. You must take into account critical elements such as the location, the length of the lease, the fee and how to pay it, what you can and cannot do on the property, who is responsible for repairs, etc.
Don’t sign a commercial lease agreement before you fully comprehend the terms. The language in these agreements is crucial and can have serious implications for your business. If you’re not careful, you could end up stuck in an expensive long-term commitment even if things take a turn for the worse or you want to get out early.
Here are five important details to consider before signing a commercial lease to help you avoid surprises down the road and ensure you’re doing this right from the get-go.
1. The Location of the Property
It’s crucial to find the perfect space for your commercial lease property and ensure it’s in a desirable location. If you’re catering to customers or clients, research the area and get an understanding of who your potential clientele could be. The easier it is for them to find your business, and the more foot traffic flow there is, the better your chance of success.
The location of commercial lease properties has a significant impact on businesses. Things like accessibility, operating costs, parking, and even the neighborhood’s safety should all be considered before signing a lease. Doing this can help avoid inconveniences and save you money down the road.
2. The Landlord and Building Owner
Do your research on the landlord or building owner before signing a commercial lease. You can also ask around to see if anyone has had bad experiences with them or knows about unsavory pasts. You want to confirm that they’re reputable and fulfill their financial responsibilities on time. Additionally, make sure they are responsive to potential commercial lease management concerns and will be available when needed.
3. Building Repairs and Upkeep
When it comes to commercial lease management, you should determine who is responsible for building repairs and maintenance. Understand if there’s a spending cap on repairs or a designated time frame for completion. This way, you can accurately budget and avoid any unpleasant surprises later. You’ll also want to find out how often the property needs cleaning and if there are any green initiatives you need to be aware of.
4. Understanding the Environment, Zoning Laws, and Nuisance Laws
Understanding the environment in which your business will operate, and any zoning or nuisance laws that may apply to your business is essential.
Zoning laws are regulations that control land use in a particular area. They are put in place by municipalities to maintain the character of a neighborhood, protect public safety, and promote economic growth. Zoning laws can impact where you can operate your business and what types of businesses are allowed in certain areas.
For example, in some cases, there may be restrictions on the number of businesses that can operate within a certain radius of one another. This is done to avoid the oversaturation of certain types of businesses.
Nuisance laws can impact your business if you produce any noise or output your neighbors could consider a nuisance. For example, if you are planning on opening a restaurant, you will need to make sure that there are no noise ordinances that would prohibit you from playing music during business hours.
5. Pricing and Terms
Of course, you’ll want to pay careful attention to your commercial lease agreement’s pricing and conditions before signing it. You’ll want to ensure that you understand all the terms and that the price and fees are acceptable. You don’t want unreasonably priced items in your contract which might make it difficult for your business venture to succeed or put yourself at a disadvantage later on.
A good business plan helps acquire financing and measure progress and can also help you get better terms on your commercial lease agreement. Outlining your business goals and needs in a document gives you a clear perspective of what to look for in an ideal commercial lease agreement. This will come in handy later down the road when it’s time to renegotiate or move locations.
At The Gibson Company, our philosophy is one that is centered around our clients, our most valuable asset. We strive to maintain the trust of our clients by delivering superior real estate solutions.
To learn more about how we can help you, contact us at The Gibson Co., today!