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Important things to consider in a commercial lease

If you're considering signing commercial lease, it behooves you to scrutinize the lease agreement heavily to ensure that you are getting the best deal possible, as well as to identify any areas that may cause conflict later on in the agreement or end up costing you more out-of-pocket than you anticipate. Once a lease has been signed, it is very difficult to change any provisions that you may find problematic.

Commercial lease agreements are commonly negotiated, so there's no reason to not at least try to improve the terms of the lease in your favor. Common areas that you may want to focus on for potential negotiation are things like your obligations to common area maintenance, your responsibilities to capital expenditures or whether or not the lease is assignable in case you choose to move locations before the term of the lease is up.

One reasonable way to negotiate your obligations to CAM is request that your landlord agree to a cap on how much your fees for CAM can increase both in a given term lease and overall. Capital expenditures in the context of commercial lease refers to the renter's obligation to repair or maintain significant structural elements of the building, like the roof, foundation or HVAC system. If the lease requires you to be solely responsible for these, it is reasonable to negotiate down this obligation.

You may also want to plan for the possibility that your space will no longer accommodate your business, or you may choose to sell the business, before the end of the lease. It is wise to make sure that your lease can be assigned to another tenant without negating your lease agreement. If you sell the business, the buyer may want the location as much as the business it houses.

These are some, but not all, of the finer points that can become big problems if not addressed early on. If you are concerned at all about your ability to understand and negotiate a commercial lease, the assistance of an experienced lawyer can help guide you through this vital process.

Source: The Balance, "10 Questions to Ask Before Signing a Commercial Lease," Jean Murray, accessed Oct. 06, 2016

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