Things to consider before entering into a commercial lease

Things to consider before entering into a commercial lease

| Dec 27, 2018 | Uncategorized |

Recently on this Louisiana blog, we talked about the decision between leasing and purchasing commercial real estate. It is a big choice to make, and one that can have significant financial ramifications for years to come. While many believe that purchasing commercial real estate is most advantageous to a business owner, this is not always the case. However, those who choose to lease commercial property need to take certain things into consideration before signing off on a lease agreement.

First, of course, is the monthly lease amount. The monthly rent paid for commercial property can take many forms. For example, a lease may be negotiated whereby a landlord pays for all utilities and repairs to the property. On the other end of the spectrum, a lease agreement may contain a provision that requires a renter to pay for utilities, repairs, maintenance, insurance and even property taxes. Therefore, an individual considering a commercial real estate lease needs to consider how much they are willing to pay on a monthly basis before moving forward.

There are many other aspects to a lease that must be carefully considered before signing off on a lease agreement. The length of the lease, for example, may be important. Landlords are typically willing to give in other areas of a lease if the lease term is for an extended period of time. This may give a renter leverage to negotiate reduced rental fees as well as broader usage terms. Usage terms contained within the lease can be of critical importance to a business. If a lease narrows the usage of the property too much, then the business may find itself in a position where it is stuck with a property and cannot put it to advantageous use.

A poorly negotiated commercial lease can cause a business owner thousands, perhaps even tens of thousands, of dollars over the course of their lease term. Unlike residential leases, the terms of a commercial lease are much more susceptible to negotiation. Therefore, those who are looking to rent a commercial property should consider discussing the matter with an attorney who can help represent their best interest.