When embarking upon an opportunity to lease commercial real estate, your business has undoubtedly viewed many alternatives, worked with a professional to secure market research, and viewed acceptable comparable space. You are then presented with a “standard” lease to consider. Many landlords, their agents and even the agents representing the tenant will make representations that this is a standard lease which is rarely, if ever, modified by the landlord and should be considered on a take it or leave it basis. It is seemingly sometimes the objective of the transaction representatives (brokers, agents) to dissuade tenants from securing legal advice. While it is true that modifications may sometimes be few, we have rarely encountered a situation where it was truly on a “take it or leave it” basis.
- Total Cost: One detail you want to confirm is how much you’re expected to pay each month. In addition to the rent, you may be responsible for general maintenance, common-area maintenance, taxes, insurance, and more. These numbers can add up quickly, so it’s worth reviewing the appropriate definitions within the lease in detail or even finding out how much other tenants are paying. You also want to pay attention to pre-negotiated increases in rent to make sure they fairly reflect inflation and the value of the location. Sometimes landlords will include property improvements within the definition of common area maintenance or repairs.
- Improvements: Another detail you want to take note of is the state of the property before you move in. If it needs improvements or modifications to work for your business, then you want the contract to ensure all those details are clearly listed and taken care of before you take possession of the property. At the very least, you should secure advance consent to the modifications or improvements you are seeking to make to avoid disputes immediately following execution of the lease.
- Maintenance: There are many problems that can occur with commercial property that have to be quickly addressed. From broken windows to electrical issues, these can often slow or stop your business for the day and need to be handled quickly. The contract needs to clearly state who is responsible for handling different types of maintenance and how quickly it must be handled. You also want to make a note if the contract requires you to keep professional services such as AC repair on retainer as that’s another expense for you to cover.
- Exclusive Use: If you’re going into a multi-tenant facility, you may want to get a clause that limits your competition in the building. You want to be the only the only dental practice and you don’t want a competitor moving in right next door. You also want to check the other businesses and your contract to make sure you’re not going to be violating anyone else’s use.
If you’re looking for commercial space to lease, reach out to the experienced real estate and business attorneys at Virtus Law Firm by calling 612.888.1000 or emailing email@example.com. Not only have our attorneys served landlords and tenants for multiple decades, one of our partners is a prolific commercial real estate investor. We can find and fix issues you may not have noticed and can help you negotiate the best arrangement for your business.