Commercial Lease Negotiation

Commercial lease negotiation is a much different experience than the typical residential leasing process. These important differences can have a major impact on your ability to start a business and keep it thriving.

How Commercial Lease Negotiation Is Different

• There are far fewer laws that offer protection to the consumer in a commercial lease. This means that there are often no deposit or rent increase caps, nor are there any provisions that help a tenant maintain privacy.
• Commercial landlords also tend not to follow any standardized forms like residential leases. Each element is designed to give the landlord a clear benefit, and these elements may not be developed with the tenant in mind. Because of this, each commercial lease should be scrutinized closely before beginning negotiations.
• Most commercial leases come with less opportunity to break the lease, and much steeper penalties once a lease is broken.
• The good news is that commercial landlords tend to be far more willing to negotiate terms than a residential landlord. This works out well, since nearly all businesses have some kind of special provisions needed to move into a space, and commercial landlords are generally eager to please in order to rent the space.
• Potential tenants should be sure to address any structural challenges a building may pose to regular business or growth. Likewise, a tenant should always ensure that another similar business is restricted from the same general location, and he or she should determine what kind of restrictions apply to signage and use of outdoor space.