Negotiating a Commercial Lease
Author: Diana Heeb Bivona What are the permitted uses of the property?
What is the particular space leased, i.e. offices, entire building, surrounding property?
What operating costs will the tenant be charged?
Is the tenant responsible for any improvements to be paid by the landlord?
Does the tenant have any responsibility for repairs and maintenance?
Does the tenant have rights to assignment and subletting?
Does the tenant have the right to renew the lease? Right cancel? Right to leave?
Is the tenant requirement to have any particularly type of insurance coverage?
Are any personal guarantees or security deposits required?
Does the tenant have an option for additional space if needed?
Ever heard the say, “everything’s negotiable?” Well, in most cases, including a commercial real estate lease, that’s true — to an extent. Factors that will influence your ability to negotiate a good lease are dependent on how much leverage you have. Are other businesses interested in the space? Has the space been vacant a long time? Are you willing to pay a good rent? Ask yourself these questions and more to determine how much leverage you are going to have during the negotation process.
Also be sure and address the following key questions when negotiating your lease: