If you’re starting a new business, one of the most important jobs you have is to pick a commercial space that will suit your company best. Commercial leasing can be quite complicated, but here are some helpful questions you can ask yourself to ensure everything is in order when it comes time to finalize your lease.
- Do I fully understand my lease? The lease for your new commercial space might be long and intimidating, but you need to make time to read it thoroughly. Make sure you understand what all of the key terms mentioned mean, and never hesitate to ask for clarification on anything you aren’t completely certain about.
- Did I negotiate well? Negotiation is possible on different parts of your lease. If you are unhappy about specific terms, you can negotiate to have things altered as long as both parties come to an agreement.
- Do I know what CAM is? CAM stands for Common Area Maintenance. You’ll likely be allocated a specific percentage of CAM you are responsible for based on the amount of space you are renting in the commercial building. The CAM section of your lease can be one of the most confusing parts, so it’s best to read it carefully to get a full understanding of it.
- What are Capital Expenditures? Capital expenditures commonly refer to the major structural features of the building in which your leased space resides. This can include the building’s foundation, roof, and HVAC system. It’s best to avoid buildings that put the responsibility for these large items on the tenants of the building.
- Is subletting an option? If you sell your business or need to move to a new location before your lease terms are up, you may or may not be allowed to sublet the space to someone else for the remainder of your lease. It’s important to know whether or not this is an option for you before signing.
- What is an Arbitration Clause? The arbitration clause is one that states that both parties to the lease agree to settle any disputes that may arise with arbitration instead of litigation. In other words, disputes will be settled out of court. Read your lease contract to understand if the clause is mandatory and know your rights in selecting an arbitrator should the need arise.