Commercial Space: A Home for Your Idea
You rent an apartment or buy a house and you have a dwelling for body and spirit. It is a home for you. Lease a commercial space and that is where your brainchild resides. It is a home for the idea you hope will pay for that apartment or house. In either case, you must still do your homework and ask all the right questions before finally signing that piece of paper. Here, I will discuss a very basic guide as to what should go into this thrilling venture in order to maximize prosperity.
Of course, it all comes down to the legal document. Just realize that it is the best interest of the landlord that has already been fully thought out and presented in the language of the lease. You may or may not come to the table with an equal grasp of what is at stake. There is no point in taking that risk. This is where a competent attorney in the area of commercial leasing comes in. Discovering meaning behind that language down the line, after signing, probably will not bode well for your business. It is important to have that aspect under control right at the very start. So what are the most important aspects of a commercial lease to be concerned with?
The length of any contract is what first comes to mind before signing. A commercial lease is no different. Most small businesses tend to start with one or two year leases. A concern with a commercial lease is the matter of rent increases. Rent increases are never welcome in the form of surprises. They are also a key negotiating factor. Last but not least, be sure to discuss renewal options. Surely, you plan for your business to grow and last well beyond that initial period of one to two years.
Of course, there is that saying about the best laid plans. It is a good idea for the tenant and his or her attorney to look into the default provisions. What happens if things go south? There are several key questions that address this contingency:
- Will I be locked out immediately?
- Will eviction proceedings be initiated?
- Can I negotiate more time?
- Can I pay the current month’s rent instead of the full remaining amount?
Did you think I left out cost? Oh no, I simply gave it its own heading. It only makes sense, right? What are some of the costs to look out for beyond the rent? How about utilities? Do you share these equally with other tenants or are you charged by square footage? Ask your attorney to seek out and investigate any “hidden fees.” Then, there will be maintenance and upkeep to discuss.
If you live in an apartment, you are most likely used to matters of maintenance and upkeep to be up to your landlord. This tends not to be the case with commercial leases. You will be responsible for what is known as Common Area Maintenance, or CAM. This pertains only to facilities you share. Beyond that, a commercial lease can assign responsibility for all property upkeep and repair. It may go into detail with specific maintenance costs such as air conditioning, maintenance, etc.
This is where you get to be the most pro-active. You want to be able to protect yourself, your investment and long-term interests. Here are just a few suggestions:
- A sublease gives you the option to sublet the space to another business.
- An exclusivity clause provides that your landlord cannot lease space to a business that directly competes with you.
- A clause regarding co-tenancy covers the possibility that your business might be adversely impacted by the closure of an “anchor tenant” that attracts customers to the property you lease. It gives you a way out of the lease if the landlord does not replace the anchor tenant within a certain period of time.
Needless to say, if you have an interest in this subject matter, you are very likely ready to look into obtaining the services of a commercial real estate attorney. If you have any questions regarding a commercial lease, contact the Law Office of H. Benjamin Sharlin LLC for a free consultation.
The Law Office of H. Benjamin Sharlin LLC is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
Please be advised that this blog is for informational purposes only, is not legal advice and does not create an attorney-client relationship.
The Law Office of H. Benjamin Sharlin LLC
is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
Call (609) 585-0606 or click the button below to schedule an appointment