PROPERTYSPARK ARTICLE

What You Need to Know Before Signing a Commercial Real Estate Lease

Unlike residential leases, commercial real estate leases are costly and challenging. Leases are legally binding agreements. As such, you must know what you’re getting into before signing any. Committing to a commercial lease you don’t fully and clearly understand can be risky. This is because not every lease will be in your best interest.

Before signing this legal document, learn what to do to ensure to avoid falling into commercial lease pitfalls. This article discusses what you need to know before signing a commercial real estate lease.

You need a commercial tenant representative

Navigating commercial real estate lease decisions can be challenging due to the legal jargon, negotiations, paperwork, and time-consuming procedures involved. Tenant-focused commercial real estate firms such as the Jeff Tabor Group, have an in-depth understanding of your local market and can advise you accordingly and respond to any questions. These commercial tenant representatives have your best interests at heart. They can help you understand commercial leasing terms to ensure you don’t commit to a lease that isn’t ideal for your business.
Using their local market knowledge, these representatives can determine the kind of property your company requires and the available properties suitable for your needs. Working with a commercial tenant representative allows you enough time to focus on your daily business operations.


Work with an experienced real estate attorney

A commercial lease’s terms are legally binding and enforceable. Failure to abide by or breaching the lease agreement terms may result in legal action being taken against you. You need an experienced real estate lawyer before signing a lease. The attorney will guide you to secure your interests. They’ll help you understand how the lease terms, provisions, and clauses work and their impact on your business to ensure you know what you’re getting into.
Since commercial leases aren’t as heavily regulated as residential leases, they give less protection. Your lawyer will help you know how signing a commercial lease can affect your business. They also help you understand the payment structure, negotiate the lease terms on your behalf, protect your rights, and help resolve disputes whenever they arise.


Research zoning laws

The physical condition of your business’s space can impact your operations. Understand the area zoning laws and then do your due diligence to ascertain that the space’s zoning can allow your business to operate as intended. This will help ensure your business runs without significant legal hurdles.

Read and understand the lease

Before signing a commercial lease agreement, reading and understanding it is essential. This will help you know your obligations towards the lease agreement to avoid a breach. You should also check the start date, rent, end date, rent escalation conditions, taxes, obligations for repair, late fee, and lease length.

Negotiate the lease

Signing a lease as presented can negatively affect your business’s profit potential. Consider negotiating your commercial real estate lease for more favorable terms and conditions. When negotiating lease terms, including service charges, repairing obligations, obligations at the end of the lease period, monthly rent, subletting rights, and break clauses. Research to learn more about the local real estate market to determine comparable property costs to help you negotiate for a better price. Request for favorable clauses and review the termination terms.

Endnote

Learning everything about commercial leases before committing to one can be helpful. Familiarize yourself with what you need to know before signing a commercial real estate lease.