Landlords will try to get the most possible amount from their properties. As a renter, it is your job to review the terms of the lease before you sign it. My recommendation is to hire your own broker to assist you with not making costly mistakes.
These are the five most common commercial lease mistakes:
- Forgetting about the Taxes
The first question to ask is what percentages of the building real estate taxes are you responsible for? What happens when the tax goes up? The answers to these questions will protect you from the landlord increasing your portion of the tax due to increases.
02. Missing a Pre-existing Condition Clause
A pre-existing condition clause requires you to return the space to its original layout. Depending on how many changes you made, these costs could get outrageous.
03. Not checking for increases in rates
If the lease states that the landlord can reevaluate the space during the lease and increase rates like water and electricity, do not sign unless you agree. It is important to understand this so that you do not find yourself paying more than what you bargained for. Make sure you iron out all those terms first so that you are clear and specifically outline what you want in the lease to avoid any surprises.
04. Signing a Standard Lease Agreement
Always negotiate lease terms. Always. If you sign a standard lease agreement, you will be responsible for all the damages that occur in the space. Make sure that you take the time and due diligence to negotiate the terms of your lease and protect your business.
05. Going into negotiations by yourself
Never go into negotiations by yourself. I recommend hiring a broker that represents the tenant. They will have the experience to get you what you need because they understand the market and your space needs. You may also need an attorney to help you avoid costly mistakes with your lease. Negotiating by yourself will often lead to hire lease costs and more problems in the long run.
Important Take Aways:
Hire a Broker
Negotiate
Avoid Surprises
Review Clauses
Understand Your Tax Responsibility