Lease Negotiation

Commercial leases are generally accepted to be a negotiation between knowledgeable business people, so there have been far fewer laws developed to protect either the tenant or the land owner of a commercial lease. Because of this assumption, many new business owners may find it difficult to avoid being taken advantage of by a more experienced land owner.

What Should Be Covered in a Lease Negotiation

There will almost always be some kind of dispute or difficulty that arises over the course of the lease simply because of the dynamic nature of a business. In order to avoid costly litigation, most commercial lease negotiation specify the process to be undertaken should any disputes arise. This can include mediation, arbitration or some other non-conventional method that both parties prefer.

The exact measurements of the space and the tenant’s right to move into a larger space should the need arise must be addressed. Because commercial property is not governed by the same laws as residential property, square footage is often exaggerated. Bringing a tape measure is not only smart, but it’s also expected of an experienced businessperson and can help greatly during negotiations.

Utilities are often based on the usage of all tenants combined in smaller complexes, but the responsibility of the payment is often passed to the tenant. Regularly checking that the appropriate percentage of utility usage is calculated with respect to the space and type of business is necessary.

Consider hiring a small business broker like to help you with a new commercial lease negotiation.