One of the most important aspects of your business has to be its physical location. If you fail to get it right regarding your commercial space, then your business will have problems achieving profitability. As such an important component of your business’ success, you need to be very careful with your lease when looking at commercial property to let . There are particular terms in the lease that you should pay attention to. They include:
Are you leasing or sub-leasing?
When you sign a lease with the landlord, then you are directly leasing the property. However, you can sub-lease from someone who has already signed a lease with the landlord for the duration of the original lease. It is generally cheaper to sub-lease from another lessee although this means that you don’t have any direct contact with the landlord. Should the original lease expire, your sub-lease also becomes void. A sub-lease might also not offer you all the protections that you would have received if you leased directly from the landlord. Either way, make sure you understand whether you will be leasing directly from the landlord or subleasing from another lessee.
How long is the term of your lease?
As a general rule, commercial lease agreements tend to last longer than residential lease agreements. If you move your business regularly, then your clients will have trouble keeping up with your ever-changing locations. You should, therefore, be very careful about the term of your lease. It is advisable to sign a lease agreement that allows you to extend your stay after the initial term has ended. While longer leases are preferred in commercial settings, don’t get locked into a multi-year lease when you are not sure of how long you will be in business. Aim for flexibility regarding lease cancellation and term extensions.
What does your rent payment cover?
When it comes to commercial property to let , you need to ensure that you understand exactly what is covered (and what is not covered) by your rent. In most cases, your rent should be inclusive of any due taxes as well as some amenities such as electricity, water, security and cleaning services. In some cases, it covers just a few, or none, of these additional costs. Take the time to question your potential landlord about all that is covered in your rent. Better yet, have your lawyer go through the lease agreement before you sign it so that you understand the costs involved. It is ideal to pay a higher rent if it is more inclusive than to pay a marginally lower rent that leaves you exposed to additional rental costs.
Are you covered by your landlord’s insurance?
No business should ever be operational without a valid insurance cover. In some lease situations, you might discover that your landlord’s insurance already covers your business if you sign the lease. Usually, the landlord will inform you of their insurance status. If they don’t, you should ask about the details in their insurance cover.
Has a professional gone through the lease agreement?
Unless you are a professional real estate lawyer, always ensure that a professional goes through your commercial lease agreement before signing anything.
Follow these top tips and your business lease will be one thing you needn’t worry about.