Renting a commercial property is a big decision. A lease is a significant commitment, and overlooking key details can lead to unexpected costs or legal complications.
Conducting thorough due diligence ensures the property meets your business needs. Below are some important points to keep in mind.
The finances
Before signing a lease, review all financial obligations. The rent is just one part of the total cost. Think about property taxes, insurance and maintenance fees. Some leases also include rent escalation clauses, which increase payments over time. A security deposit may also be required, so confirm the amount and conditions for its return when the lease expires. Charges for repairs, maintenance and any communal upkeep fees should be clearly defined before you sign anything.
Lease terms
Reviewing renewal terms and subleasing restrictions is essential before signing a commercial lease. Renewal clauses outline whether you can extend your lease and under what conditions. Some leases offer automatic renewal, while others require renegotiation. Understanding these terms can help you plan for long-term stability.
Subleasing restrictions determine whether you can rent out all or part of the space to another tenant. If your business needs change, subleasing could provide financial relief. However, some landlords prohibit subleasing or require approval before allowing another tenant.
The location of the property
The condition and location of the property can directly impact your business. Before finalizing the lease, consider:
- Structural integrity, plumbing and electrical systems
- Accessibility for customers and employees, including parking availability
- The presence of nearby businesses and how they may affect your operations
The right commercial lease can be highly beneficial for your business. Seeking further legal information before signing anything is in your best interests.
