Renting property is something most business owners have to consider at one point or another in the course of running their businesses. In addition to scouting the best location for the rental space in order to maximize the potential for attracting clients, a business owner should also consider what terms are included in the commercial lease.
A commercial lease is a contract, and the business will be held to the terms of the contract, just as the business would be under other business contracts.
One of the most important issues to consider is the proposed use of the rented space, and whether those potential uses of the property are included or excluded under the terms of the lease. The business should look ahead when considering potential uses of the space. If the business will seek to expand in the future and offer different services, the business owner should consider if these future services will be excluded under the lease.
Along these lines, the business owner should inquire about whether he or she will be allowed to add fixtures or otherwise make changes to the rental space that go beyond moving in furniture. The business owner should also find out if the business will be required to restore the space after removing the fixtures at the end of the lease.
It is also important for the business owner to know what kind of commercial lease he or she is agreeing to in terms of maintenance costs and utilities. In some cases, a commercial lease may require the business to take on some of the costs that are traditionally associated with a landlord. For example, the business may be responsible for all or some utilities, or the business may be responsible for making repairs and paying property taxes. If the business does not factor in the costs of these extra financial responsibilities in addition to the rent, the business may run into financial trouble.
Even when the business has negotiated the price of rent, the commercial lease may include a clause that is often referred to as an escalation clause. This is a cause through which a landlord can raise the rent without prior negotiation with the tenant. This is usually based on a percentage of the rent or tied to the rise in inflation or to other costs that the landlord may incur. Business owners who are not able to negotiate away these kinds of clauses should at least try to negotiate a cap on how much the rent can be raised.
Contact an Experienced Business Attorney
If you are a business owner looking to enter into a commercial lease, you cannot afford to enter into the lease without having an experienced attorney look at the terms and advise you on whether or not the terms suit your business needs. For more information, contact us at Momkus McCluskey Roberts, LLC to speak with our experienced DuPage County business law attorneys.