Starting a retail business can be one of the most exciting times in an entrepreneur’s life. However, finding the perfect location, negotiating the lease terms, and ensuring that the lease protects your business interests can be overwhelming. At Tomarchio Enterprises, we’ve been helping startups get into their retail spaces for years, and we wanted to talk about some of the basics of retail leases.

What Exactly is a Retail Lease?

Retail leases are legally binding contracts entered into between a tenant and a landlord. They include terms and conditions like the rent, length of the lease, and any additional costs that may be incurred, such as maintenance fees or utilities. Before signing a lease, it’s essential to read and understand the terms of the agreement thoroughly. You should seek out legal advice from a professional Maryland commercial real estate company to help you understand your lease if you’re having trouble understanding it.


The Length of the Lease

There is nothing more important than length when it comes to leases. For startups, it is usually recommended that tenants sign leases with a shorter lease term, such as one or two years, to provide flexibility in case things don’t go according to plan. Having a shorter lease term also provides you with the ability to either renegotiate your lease or relocate if you need to in the coming years, an option that provides you with a good deal of flexibility.


Ensure Your Lease Contains Fair Payment Terms

Another crucial factor to consider is the rent amount and payment terms. It is important to negotiate the rent amount to ensure it is reasonable and within your business budget. The last thing you want to do is get locked into a rate that you can’t ultimately afford.


Retail Leases are Intended to Protect Everyone

A retail lease also includes provisions that protect the interests of both parties. These provisions include security deposits, subleasing, and termination clauses. A security deposit is an upfront payment made to the landlord to cover any damages or unpaid rent. Subleasing allows the tenant to rent the property to another party, while termination clauses outline the terms for ending the lease agreement.


Consult with a Commercial Real Estate Company in Maryland That Will Work for You!

Understanding the basics of a retail lease is crucial for any startup looking to rent a retail space. To set up your new business for success, you’ll need to negotiate favorable terms for your lease. Additionally, understanding the provisions included in the lease agreement will protect the interest of both parties. Putting the right lease agreement in place will do wonders to help get your startup off the ground. 


You should seek legal advice from an experienced Commercial real estate agent in Maryland to ensure that the lease agreement is fair and legally binding. At Tomarchio Enterprises, we’ve been providing Maryland entrepreneurs with our commercial real estate services for years and can help you too! You can reach out to us at (410-861-8320) or send us a message online.