3 Points to Note About Commercial Lease

Most business owners moving into new premises are faced with a choice. The choice is between buying or leasing a commercial property. While both options have their pros and cons, a majority of business owners usually opt for the latter, i.e., a leased property. This is mainly because with a leased property, you get to avoid the responsibilities and liabilities of owning a property.

If you’re in the same boat and are about to sign a commercial lease, keep the following factors in mind.

Commercial Leases Come with Longer Terms

These leases typically have longer terms than residential ones. And this isn’t necessarily a bad thing for your business. What a longer lease essentially does is that it gives your business location stability and also provides the landlord with income stability.

However, if you prefer a shorter term for any reason—could be because you’re starting a new business and things are uncertain for you— you can try and negotiate a shorter term and add an “option clause” to your agreement, which will allow you to renew the lease later if you want to.

Limited Use but Full Responsibility for Fixtures

When you lease a property, the agreement will outline exactly what it’s going to be used for, and it can’t, at any point, be used for anything other than what’s been written down. So, if you have possible growth-related changes in mind—put them in the lease.

Also, it’s important to remember that, unlike most residential leases, in a commercial property, you’d be responsible for any fixtures and related costs associated with the building while it’s in your use. This includes everything from lights to trial rooms and other essentials your business needs. And when you leave, it’s your responsibility to restore the property to the way it once was.

Expect Annual Rent Increases

The bad part is that the rent of your commercial property is most likely going to increase every year. But the great part is that it can’t increase more than once during a single year.

This annual increase could be based on a pre-decided percentage stated in your lease, or it could be based off on an annual review.

In either case, the terms of the annual increase would be predetermined at the time of signing the lease, and the landlord will give you prior notice as well.

Our commercial lease solicitors can help you out with a commercial lease and ensure you understand all the clauses.

Get in touch with us right away to set up an appointment.