Negotiating Commercial Lease Agreements
Do your homework before you negotiate a lease. Introduce your company`s current and expected future needs and set your budget and preferred location. There are different types of commercial leases and a number of abbreviations that differ in terms of meaning and use, depending on who uses them. When it comes to commercial leases, there are several basic structures that correspond to what the tenant pays each month in addition to rent: part of the options for renewing the negotiation is to set rent increases so that you don`t have any surprises in front of you. Your landlord will probably want to increase the rent for each additional year. Read the terms of your commercial lease, as this is the loss and termination of the lease. You will need a clause that will give you time to cure a default before eviction, especially a clause that will allow you to pay one month`s rent rather than the full amount owed for the lease. You will be willing to negotiate all penalties for early termination of the lease if you decide that you must leave before the end of the lease period. Tenants who agree to sign a long-term lease win at the bargaining table. If an owner knows that an office will be occupied for a longer period of time, they are more likely to make concessions. However, long-term leases are not ideal for all businesses. If your future requirements are uncertain or if you are starting a start-up, a short-term lease may better match your business. Below is a letter template that can (and should) be revised to be used either as a first offer or as a counter-offer for the rental of a commercial space for your business.
It should not replace legal advice, but simply show how you can express an interest in renting a particular space. Your business structureIf you are integrated, tell where you are integrated. If you are a tax-exempt organization, include it in your letter. It is rare for owners to offer you free-bids or benefits to non-profit organizations just to get a tax deduction, but they may be more inclined to negotiate or rent for a noble cause than to a motorcycle club. In addition, it is important to understand your personal responsibility for signing a lease and depends on your business structure. It is also important to note that you will probably have the most bargaining flexibility regarding the rental structure with an independent owner, unlike a business landlord. (In shopping malls, for example, it is generally difficult to negotiate even the basic rent, let alone the structure. In a shopping mall, it`s all about negotiating benefits.) The most important thing you can do is carefully read your commercial lease and fully understand. This way, you can recognize the benefits you have in applying for changes and preparing for your tenant duties. Worse still, many companies give up a lease altogether and lease their land every month.
If you do, you could be evicted without notice and lose the value of the renovations you have done. Without leasing, you may also have difficulty obtaining bank financing for your business. Once you have recognized these requirements, you accept them as talking points in the lease negotiations. In some cases, your landlord may be willing to pay some of the upgrade fee if it means keeping you as a tenant. Negotiating a commercial lease will probably take longer than you expect, so it`s important that you start your search for the perfect office as soon as possible.