Common Commercial Lease Mistakes

March 17, 2021

Common Commercial Lease Mistakes and How to Avoid Them — A common business need that every business owner should be prepared to deal with is finding the space for their business operations, be it a manufacturing facility or an office space. Whether it is the main office, a shop, or a manufacturing facility, renting real property can be an asset or a liability depending on how early the negotiations start and how well the final terms are written. Leasing the space out can also be tricky if you and your tenant are not on the same page from the start. Let us give you an overview of some of the common commercial lease mistakes that new and experienced business owners make, how you can avoid them, as well as some details that you should know about. The Basics The business of commercial leasing is a cutthroat world. As they say in real estate, everything is about the location. If you are selling a luxury brand, you definitely do not want to be caught up in the outskirts of town. If you are dealing with downtown clientele, you cannot afford to locate your office in the suburbs. If you are processing specialty food items, you would also want to locate your commercial kitchen in the most suitable location for the business. If you have a manufacturing facility, you would want for it to be easily accessible by your target customers. Keeping yourself and your business in the right location could be critical to your cashflow. What is a commercial lease? Basically, a commercial lease is an agreement written up and signed by both parties, the lessor and the lessee. The lessor is the individual who owns the property or leases it out to others. You, as the business owner, is the lessee. If you get confused by the terms, think of it as the relationship between the landlord and the tenant. A commercial lease is entirely different from a residential lease, both in the key legal terms, in the landlord’s rights and in the financial terms. When you enter into a commercial lease agreement, it is expected that you are knowledgeable about commercial real estate and prepared to negotiate in accordance with the then current local market conditions. Having rented an apartment as a tenant is not sufficient experience for negotiating a commercial lease. If you do not protect yourself properly when entering into a commercial lease, it could lead to legal, financial and tax problems down the road. The Common Commercial Lease Mistakes to Avoid There are a couple of things that you need to avoid in order to make sure that your commercial lease agreement will protect you. Failure To Hire A Realtor, A Lawyer, Or A Professional Hiring a realtor, a lawyer, or any professional with great experience in the law and commercial leasing is not an added cost but an added layer of protection. All of the terms that are included in a commercial lease are going to be easily handled by individuals who know the market and understand what is and is not negotiable in a lease. […]

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