If you are preparing to lease commercial property, you may be tempted to forego the expense of retaining a commercial real estate transactions attorney, especially if yours is a small or new business and you have multiple priorities vying for financial resources.
This is one of those areas, however, in which the old saw, “A stitch in time saves nine” really does apply. Signing a commercial lease without a thorough review by a professional experienced in commercial lease transactions can end up costing you much more down the road. Here are some reasons why:
Attorney review will probably cost less than one month’s rent. Of course, this is not a promise, nor is it a certainty. But when you think of the fact that a commercial lease term is usually at least three years, the idea of spending about one month’s rent making sure it’s the right lease to sign makes a lot more financial sense.
Prevent the landlord from renting to your competition. Most leases, whether residential or commercial, favor the landlord who wrote the lease. Thus, the lease agreement the landlord presents you with almost certainly does not contain any clauses preventing the landlord from renting space to you and to your direct competitor. This is especially important if you are renting space in a strip mall or other collection of business spaces.
Negotiate a reasonable responsibility for common area maintenance fees (CAMs). Most lease agreements base common area maintenance fees on the total number of tenants or total number of rented square feet. This may seem reasonable when you rent a business location in a complex that is fully rented. However, if tenants move out — or the landlord kicks them out — then your percentage of responsibility will drastically increase. A commercial lease transactions attorney can construct an agreement regarding CAMs that will be fair to you and affordable in the long term.
Looking for more general information? The Small Business Association’s website has a helpful section on choosing your business location and equipment.
