Leasing commercial space is a fact of life for many business owners. The expense of commercial leasing is considerable, but cost is not the only factor to consider when leasing a commercial space. The following are a few tips for business owners when negotiating their commercial space lease.
When discussing fees, inquire about utility costs as well. Utilities are often the responsibility of the tenant, but it still behooves business owners to confirm who will be paying the monthly utilities.
• Negotiate an exclusivity clause. Business owners often don’t want their competitors to move in across the street, and they certainly don’t want them to move into the same building. Protect your business from such a development by negotiating an exclusivity clause into your lease. Such clauses prevent landlords from leasing other spaces on the property to your competition.
• Carefully read the default language. Before signing a commercial lease, business owners must familiarize themselves with the default language therein. Determine what happens if you default on the lease, including if you will be locked out upon your first missed payment and if the landlord will immediately initiate eviction proceedings in such instances. Many commercial leases also include language stating tenants are responsible for any legal fees landlords accrue in the case of a default. Though it might be difficult to negotiate the default language in a lease, business owners should still know that language prior to signing a lease.