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How do I negotiate a commercial lease?

On Behalf of | Nov 2, 2017 | Commercial Real Estate |

Commercial leasing is an important concern for many businesses and companies. As a result, it can be helpful to understand the different aspect of a commercial lease and how to negotiate a commercial lease to help avoid commercial lease litigation. Commercial leases are commonly negotiated and most all of the terms of the lease may be negotiated but tenants negotiating a commercial lease may wonder what terms they should consider.

To begin with, when negotiating a commercial lease, the cost of rent should be considered. The owner of the property will usually calculate rent according to square footage multiplied by the cost per square foot. The tenant may be able to negotiate the rent with the property owner so they should be familiar with how it is calculated. There are different methods for determining how taxes and insurance will be paid for so it is also helpful to be aware of them when negotiating that aspect of a commercial lease.

Other terms that must be negotiated include the length of the lease. The tenant may be able to obtain a more favorable rental amount by signing a longer lease. The tenant may also be able to negotiate for, and obtain, allowances for improvements to the property. Other considerations that should be negotiated and included in the lease include the use of the property and any sublease or assignment provision. It is important to include all the terms agreed to in the lease document.

Overall, it is helpful to understand the factors and considerations that go into negotiating a commercial lease and to be aware of what they are to provide an advantage when negotiating a lease. Carefully negotiating a lease may help avoid disputes down the road but the legal process also provides helpful resources if a commercial lease dispute does arise at some point.

Source: Smallbusiness.findlaw.com, “Negotiating a Lease for Commercial Real Estate,” Accessed Oct. 31, 2017