A business lease is a very important part of your small business. Negotiating for a favorable lease settlement puts your small business in the position to be successful.

Keep in mind the fact that a property lease agreement is arranged by the landowner to favor the landowner. Your responsibility is to examine it thoroughly, understand what the lease agreement says, after which ask for the amendments that you will require.

Evaluate The Lease Term

Once you’ve found a commercial rental location, completed your commercial lease application, and applied for a property lease, you will get real estate forms for your lease. The one of the issues that you need to work on is the lease term.

Normally a term of 1-2 years is good for the small businesses, with renew option. The process doesn’t fasten you in for a long time; however provides you the option to stay if it is a best fit for you. In case you feel that you can easily find a similar location, a short-term lease is good for you when rents in your place drop down or it turns out to be an unfavorable location.

Look For The Similar Rents

In a business lease settlement, the rent amount is an important factor to consider. Do your groundwork and understand what the current available costs are in your location so you can negotiate a fair price.

Some of the negotiating renewal options consist of determining rent increases, so you will not experience any surprises. Your landowner will almost certainly need to increase the rent every year. You need to work out a cap on these rent increases, so it remains cheap. You can additionally negotiate the amount of your security deposit and the conditions for its return.

Look For The Hidden Charges

You may even apply for a gross lease program, in which all costs are incorporated, or even a net lease program, in which there are costs other than your rent. There are so many commercial lease programs that make the tenant liable for costs which include renovation or maintenance of common areas.

Try to get the information on those costs in advance and negotiate this part to be as positive as possible. Find out in case your business will be liable for equipment maintenance and find out the existing conditions of those equipments so you can estimate the cost.

Request For Favorable Clauses

You can ask for changes in the lease settlement that will help you. For instance, a section allowing you to sublease the property can be essential if your business unexpectedly relocate or close. You may need to ask for a provision that limits the landowner from leasing any other unit on the location to a business much like yours.

A co-tenant provision will allow you to break the lease if a large anchor tenant leaves. It is also possible for you to negotiate for the landowner to be responsible for making improvements and renovation to the property before you move in.

Check The Lease Termination Clause

Examine the terms of your commercial property lease because failure to meet the term may lead to termination of the lease. You also will need to put a clause that allows you time to fix the default before the eviction; predominantly one that allows you to pay only one month’s rent rather than the whole amount payable on the lease. You may additionally need to negotiate any consequences for early termination of the lease agreement if you decide to leave before the lease term is over.

The important thing you can do is to examine your lease contract very carefully and understand it fully. This helps you to understand what benefits you so you can ask for the modifications in the commercial lease contract plus it also prepares you on your responsibilities as a tenant.

Summary
Article Name
5 Key Points To Negotiate Favorable Commercial Lease Terms
Description
A business lease is an important part of your small business. Negotiating for a favorable lease terms puts your business in the position to be successful.
Author
Merchant Advisors
Merchant Advisors
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