The Biggest Commercial Lease Mistakes You Need to Avoid
Disclaimer: This article on Commercial Lease Mistakes is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Your business is growing and it’s time to move out of your garage, home office, or dining room table. It’s time to find that special place that will help you take your business to the next level. Congratulations!
However, more is involved that finding a realtor and thinking about square footage. No, you need to make sure that your commercial lease serves you well and protects your interests. (For a high-level view of what your commercial lease may include, check out this previous article)
In this article, we will talk about the dangers of signing a bad commercial lease, as well as specific mistakes that you can avoid.
The Cost of Signing a “Bad” Commercial Lease
Commercial leases can be complex, and if you’re not careful, you could end up signing a bad one. A bad commercial lease can cost you thousands of dollars in rent, repairs, and other expenses. It can also tie you to a property that’s not suitable for your business.
One of our clients recently found herself in that very situation. Not only was she faced with the prospect of having committed to a property that she could not use for her business, but she was still obligated to pay rent on it!
We want to help you avoid making the same mistakes our client did. That is why we’ve put together a list of the biggest commercial lease mistakes to avoid.
Mistake #1 – Failing to Negotiate Your Commercial Lease
One of the biggest mistakes that tenants can make is simply failing to negotiate their lease terms. Remember, once you enter into a lease agreement, there is simply not a whole lot that can be done to change the terms – so it’s important to get everything in writing upfront.
Mistake #2 – Assuming that “Standard Terms” are Fair
In many instances, “standard terms” tend to favor landlords more so than tenants. As such, it’s important to have a lawyer or experienced commercial leasing agent review your lease agreement before putting pen to paper.
Mistake #3 – Not Understanding Your Commercial Lease
It is important to clearly understand any agreement that you sign. However, this is especially true when it comes to a commercial lease. If there is anything in the lease that you do not understand, be sure to ask questions and get clarification before signing.
Be sure to carefully review the language regarding operating expenses in your lease agreement. In some cases, tenants may be responsible for a portion of these costs. That is why it’s important to clearly understand what you will and will not be responsible for.
Mistake #4 – Rushing into a Decision
When signing a commercial lease, it’s important to take your time and carefully consider all your options. Once you sign a lease, you will be legally obligated to uphold your end of the agreement. So, be sure that you are fully committed before putting pen to paper.
Mistake #5 – Not Talking to a Real Estate Lawyer
You may feel like it is an unnecessary expense. However, it always a good idea to have a real estate lawyer review your commercial lease agreement before signing. They will be able to identify any potential red flags and help you negotiate more favorable terms.
Of course, you don’t want just any real estate lawyer. You want an experienced commercial lease lawyer who knows the ins and outs of commercial leasing. You want a team with litigation experience writing your contracts. That experience means they have seen how things can go wrong and how to help you avoid those same traps.
In short, you want a real estate law team like the one at Beeksma Law.
Are you in the process of negotiating a commercial lease? Do you have any questions about your rights as a tenant? If so, reach out to our team of experienced real estate lawyers today. We would be more than happy to help you navigate the leasing process. Our team is here to ensure that you are getting the best possible deal.
