What You Need to Know Before Signing a Commercial Lease

Written by Economic Development Jobs on October 18, 2016. Posted in Commercial warehouse, Commercial warehousing, Entering into an office lease agreement

Leasing commercial property

Commercial warehousing and distribution leases are nothing to joke about. However, for many business owners and first-time investors, there can be multiple things you may not understand or that you may overlook.
To avoid overlooking an important detail, it’s important that you do your research beforehand. Here are a few important differences between residential and commercial leases to help keep you informed.
Fewer Consumer Protection Laws
In any residential lease or rental agreement, there are typically consumer protection laws. These can include security deposit caps and rules that serve to protect a tenant’s privacy. In commercial leases, however, there are fewer of these. This means that there may be a much higher security deposit and unexpected visits from a landlord or property manager.
No Standard Forms
Rather than a standard lease agreement that comes with many residential rentals, there are very rarely standard lease forms in warehousing and distribution. Leasing a warehouse involves custom negotiations that suit both a business owner and a landlord’s preferences and needs.
Long-Term and Binding
A commercial lease is typically set for a much longer and legally binding period of time. While a residential lease may allow a month-to-month agreement or only be for one year, renting a warehouse involves committing to that space for a number of years at a time, in most cases.
Negotiability and Flexibility
Fortunately, commercial leases are much more open to negotiation. If there’s a certain requirement you as a tenant need to be met, then you can often negotiate the terms of your lease to attain that. Similarly, if a landlord has a set of rules or terms that they’d like met, you can negotiate those as well.
While there are certain aspects of commercial leases that are strict and binding, the majority of these documents actually allow greater flexibility in terms of the document’s contents and what will be required for the duration of the lease itself. However, it’s important to remember that no matter the space, a lease is a legally binding document that you’re required to abide by for the duration of your occupancy in a certain space. Don’t forget to do your research.

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