If you want to lease a corporate property for your business it is wise to have property lawyers look it over to ensure it has no unfair clauses that will make life hard for you. Most such leases are in favour of the landlord and are written up by his or her lawyer. So it is imperative that your lawyer studies the lease too. Meanwhile here are 9 tips for leasing corporate property.
- Budget is a major concern with leases because it can be your biggest expense. While you have a budget for the lease, your landlord may be allowed to increase it, so watch for this; it should be written into the lease. The landlord may also want to charge you for part of the maintenance, repairs, upkeep and insurance. A gross lease may include these things, while with a net lease there will be a separate charge.
- Note the length of the lease. If you are a start-up or new business and are not sure if the location will be suitable, you will not want to be stuck with a ten year lease or even a 5 year one. That said, it is good to have an option to renew the lease if everything appears to be working out.
- Think about if there is enough space for your stock, employees, furnishings and storage space for inventories. Leasing is usually charged by the amount of space. While smaller might be cheaper, it doesn’t allow room for the business to grow and expand. However, it is important to stay within budget.
- Is the location suitable? Consider whether there is plenty of foot traffic going past and parking spaces nearby – spaces that your customers are allowed to use. Location is not necessarily that important for some businesses, but for others it is essential for success.
- You can add a clause to the lease that prevents the landlord from renting space nearby to a competitor. It is a good idea to have your commercial lawyer draft up a watertight one.
- Does the lease allow you to make modifications that may be essential to your business? For instance, if you are selling goods for disable people, is there a ramp or only steps?
- The lease should also specify where advertising signs can be placed.
- Termination rights are another important thing to look at in a lease. You’ll need to know what your rights are should you need to terminate early.
- Be prepared for problems. When you are prepared, the problem can be solved so much more easily. If you should default on payments you need to know if this will be arbitrated, mediated or go straight to court.