What to Do Before Signing a Commercial Lease

It is always a tricky situation trying to change your mind after you have put your signature on a commercial lease. When looking for retail space, an office building or any area to put up your business, you should read through the contract carefully, and if possible, run it through a lawyer before committing to it. You should also have a candid and formal discussion with the landlord, and some of the factors you must consider before signing a commercial lease include the following.

Negotiate the Best Deal

The fact that the landlord has put a figure on paper does not mean that it has to be the last price. You can still negotiate and ask them to bring the rates lower, especially if you think the office space is not as prime as the price indicates. Give them proper reasons why you feel they should reduce the cost. While negotiating, you should also ask if you are allowed to make changes to the building, such as partitioning and painting.

Understand the CAM Terms

The term CAM is used to mean the fees that you, as the tenant, will be paying for the maintenance of the office space until you vacate. Different landlords use their own methodology to calculate this. Some sneak in their own personal expenses on this and slap it on the tenant. You should have a candid discussion with the landlord and have them explain the criteria which they are using to come up with the CAM terms.

Ask if There is Flexibility in the Lease

If your business has the potential for growth, and one of your business plans is that one day you will assign the lease to someone else as you move to a bigger space, then you should let your landlord know. If the contract reads that the lease cannot be re-assigned, then you will get into trouble, and it might cripple the entire business. Always do your research on the best practices to follow when taking on a lease.

Check for an Arbitration Clause

Have you actually considered what may happen if you and your landlord fall out? In the worst-case scenario, they throw you out and cripple the business. In others, you will find yourself being dragged to court in tedious litigation processes. It is best to have an arbitration clause in the lease agreement so that you can resolve issues without having to go to court.