A commercial lease agreement can feel intimidating, especially for those who don’t work with real estate often. However, carefully reading the entire lease is essential to securing the best deal for your office space. While all parts of the lease matter, certain terms require special attention.
1. Rent and Common Area Maintenance
The last thing you want is a surprise when it’s time to pay rent. Therefore, review the rent terms carefully. Are there any additional fees on top of the base rent? When is the rent due, and how should you pay it? Furthermore, check the common area maintenance fees and what they include. Knowing what isn’t covered is equally important before you sign the lease.
2. Right of First Refusal
When you find the perfect office space, you’ll want the chance to stay when your lease ends. A right of first refusal clause ensures that your landlord offers you the option to renew before offering the space to other tenants. This clause gives you priority, helping secure your space for the long term.
3. Definition of the Premises
This section explains exactly what space you’re renting. Ensure the square footage of the office is listed correctly. Additionally, if the landlord has promised access to shared areas, like restrooms, a break room, or a reception area, confirm that these are included in writing. Verbal promises can easily be forgotten, so ensure everything is documented in the lease.
4. Subleasing and Assignment
If your business needs change and you no longer require all the space, subleasing or assigning the lease to another tenant can help reduce costs. Therefore, it’s essential to negotiate flexible subleasing and assignment rights. This way, you can adjust as needed without being stuck with unused office space.
5. Use and Exclusives Clause
Check if there are any restrictions on the type of business you can operate within the building. These restrictions could limit your ability to expand into new areas. Additionally, an exclusives clause can prevent competitors from moving into the building, which can be critical for certain businesses. Therefore, ensure these clauses align with your business goals.
6. Maintenance Clause
When something breaks, who is responsible for the repairs? The maintenance clause should clearly define who covers the costs and who arranges the repair work. A well-defined clause will help you avoid future disputes and ensure smooth operations in your office space.
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