Commercial leases are intimidating to negotiate. Most commercial leases, unlike residential, go on for many years or even decades. Therefore, you are stuck with your tenant for a long time, so the deal better is a good one. This post will go over some tips for negotiating a commercial lease.
First, know what you want before you go into negotiations. You can’t have a general idea of where you want to go; you need a solid vision, and then you can negotiate to execute that vision. Unless you are crystal clear, you risk negotiating away something critical to your business.
Second, consider the legal implications of the lease. Understand the nature of renewal terms, who bears the maintenance costs, property taxes, and insurance. Make sure you thoroughly understand how each of those items operates before you negotiate, you need a solid understanding of each term to ensure you don’t mistakenly agree to a bad clause.
As part of reviewing the meaning of terms, review your rights as a business owner. Some states and cities enact strong protections for small businesses. Make sure you understand your rights and the rights of your prospective business partner. You need to know how far you can go in negotiations.
When it comes to the actual negotiation, stay focused on the contract and be clear on what is covered under the lease. You don’t want a misunderstanding to result in future litigation which costs everyone money. Furthermore, if negotiations break down, don’t be afraid to walk away.
Are you trying to negotiate a commercial lease? If yes, you may want to consult with an attorney. The last thing you need is to get trapped in a bad deal with a lessee whom you do not like or trust. A lawyer can review your lease terms and advise you of the possible impact, to help you avoid potential litigation issues.