Commercial leases are very different from residential leases. They are typically set up so tenants cover things like insurance, property taxes, and maintenance. This structure is called a triple net lease. The tenant’s ability to negotiate can be somewhat difficult because landlords often want to offer their tenants the same rates. However, the market may help tenants negotiate more favorable terms if the space in question is not highly sought after. If that’s the case, a tenant could ask for more build out money or more parking spaces or even less base rent. Additionally, if a landlord has a need to fill a spot quickly, that can be a time to try to negotiate your best deal.
The list below describes certain terms that you should understand and negotiate if possible.
Commercial lease checklist:
As you think about the types of lease terms you need, you should consider the following items in your commercial lease agreement.
- Lease term
- Renewal options for the lease
- Rent amount
- Common area maintenance payments – are there any and if so, what are they and how are they calculated?
- What items are included as common area maintenance expenses
- Rent increases, including when and how those are calculated
- Whether insurance, property taxes, and maintenance costs are included in your lease (or will you need to pay for these things yourself)
- Amount of security deposit
- How and when the security deposit will be returned
- Details about all of the space you are leasing (including, restrooms, hallways, parking lots, walkways)
- Terms for improvements of the space made by the landlord
- What modifications are permitted
- Whether or not there is build out money provided by the landlord to revamp the space to fit your specific business needs
- Whether or not you can hang signs
- Whether or not the landlord can rent to competitors of yours
- Who is responsible for paying for improvements or modifications?
- Who decides, landlord or tenant, when items need replaced or repaired?
- Accessibility issues under the ADA if you are employing more than 15 people
- Whether subleasing is permitted
- What are the options to renew the lease?
- Termination of the lease (notice requirements, penalties)
- How disputes will be handled, e.g., mediation, arbitration, and any notice requirements pertaining to a breach
If you need assistance with a commercial lease, do not hesitate to contact Wick Law Offices, LLC.
Wick Law, LLC is a small business legal practice, representing owners, investors, and entrepreneurs in all aspects of commercial, corporate, and business law, estate planning, contracts and negotiations, business litigation, and real estate. For more information: Contact 614-572-6366, visit www.mwicklaw.com, or email us at email@example.com. Wick Law, LLC is located in Columbus, Ohio.
(Materials in this article have been prepared by Wick Law, LLC for general informational purposes only. This list is for educational purposes and is not to be considered exhaustive. More items could be added to this checklist based upon the type of transaction or industry standards. These materials do not, and are not intended to, constitute legal advice. The information provided is not privileged and does not create an attorney-client relationship with Wick Law, LLC or any of the firm’s lawyers. This checklist is not an offer to represent you. You should not act, or refrain from acting, based upon any information in this checklist. Wick Law, LLC maintains offices in Columbus, Ohio, and has lawyers licensed to practice in Ohio and in the United States District Court, Southern District of Ohio. The firm does not intend to practice law in any jurisdiction where the firm is not licensed.)
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