A commercial lease represents a major financial commitment for your business. Understanding what to negotiate can save you thousands of dollars over your lease term.
In This Article
Commercial Lease Length and Flexibility
Your lease duration sets the foundation for your business planning. Short-term leases offer flexibility but often come with higher rates. Long-term leases provide stability but require careful consideration of your future growth. Consider negotiating extension options that lock in reasonable rent increases.
Commercial Lease Cost Structure
Base rent is just the start of your financial obligations. Your commercial lease should clearly outline how additional costs like utilities, property taxes, and insurance get divided. Ask for a cap on annual increases and challenge any unusual charges. Many landlords will negotiate these terms if you show them comparable market rates.
Repair Terms
Your lease must spell out who handles repairs and maintenance. Some landlords try to pass all costs to tenants, but this shouldn’t always be the case. Negotiate fair sharing of major system repairs and replacements. Get specific about response times for emergency repairs and your rights if the landlord fails to maintain the property.
Modification Rights
Your business will change over time, so your commercial lease should allow for modifications. Discuss your rights to alter the space, add signage, or make technological upgrades. Include provisions for first rights of refusal on adjacent spaces if you might need to expand.
Default Clauses
Every lease includes consequences for missing payments or breaking rules. Negotiate for cure periods that give you time to fix problems before facing penalties. Ask for clear definitions of what constitutes a default and what remedies are available to both parties.
Exit Strategy
Even with careful planning, you might need to leave early. Your commercial lease should include subletting and assignment rights. Negotiate reasonable conditions for early termination and transfer fees. Include force majeure clauses that protect you during unexpected events.
Operating Expenses
Your lease should detail every possible operating expense. Request regular expense reports and audit rights. Challenge any unusual costs and seek caps on annual increases. Many tenants save significantly by closely examining these terms before signing.
Remember to seek legal review of your commercial lease before signing. Each market has local customs and regulations that affect lease terms. Take time to understand every clause – this investment in careful review can prevent costly surprises later.
Your Next Step
Contact us today at 0121 268 3208 or via email at info@onyxsolicitors.com for a FREE consultation. Let us help you achieve the peace of mind that comes with having expert legal support on your side.
