Knowing the Ins and Outs of Commercial Leases


When you need to rent commercial space for your business, you can’t do so without taking a step back and thinking it through. The responsibility that comes with commercial leases should not be taken lightly, and though you may already understand residential leases, there is a big difference between the two. Never sign a lease without properly reading it through and understanding the monthly rent you will need to pay, the length of the lease, and the size of the space you will need to rent.

One major difference you will encounter when comparing residential and commercial leases is that the laws governing the two are significantly different. Consumer protection doesn’t extend to leases of the commercial variety, therefore, there are no caps on the amount of security deposit required and generally, no rules are written pertaining to the privacy of the tenant.

The commercial lease you will be looking at is completely written at the discretion of the landlord. This means that the rules and regulations can differ from person-to-person, which is why you need to read the entire contract over before signing it. If you have any questions, ask them before committing to anything as your lease is still legally binding. Since you are legally bound by your lease, it is important that you know it is extremely hard and costly to break.

Tips For Understanding Your Lease

When you read over the terms and conditions put forth in your contract, you will need to pay attention to the little things. For example, check the length of the lease you’re signing. If your business is just starting out, it can be hard to think several years ahead into the future, which is why you should avoid a lease that requires five or even ten years of commitment. Your business may not work out, or you may need to expand, which is why a short-term renewable lease is best.

Additionally, you should pay attention to the amount you’re expected to pay each month for your rent. Factor it into your business budget and make sure that you can afford to pay it even if your business has a slow start for the first couple of months.

Depending on the type of business you will be running, necessary physical changes may need to be made to the existing space. For example, cubicles may need to be installed, the building may need to be rewired for better communication, or a loading block installation needs to be undertaken, in which case you should discuss these needs with the landlord.

A commercial lease is responsible for other things pertaining to your business as well. If you business, for example, will solely rely on walk-in customers, your shop should be able to display a large sign. Some leases don’t allow for this, so double-check before signing it.

Lastly, if you want your business to be the only one in a large commercial center, check that your lease restricts others from opening the same business next to or across from yours.


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