10 Things You Should Know When Renting Commercial Property
Renting a place for your business doesn’t just involve finding the suitable location. You also need to sign an agreement or contract, a written form that usually favors the property owner. But arrangements are mostly flexible. You can arrange negotiations that work for both yourself and the proprietor.
Renting commercial space is almost the same as renting residential property. Both of these can be complicated, and on top of it all, there are 50 pages worth of detailed agreements. Commonly each case of the accord is different, and it will matter on the leverage you have on how much you can negotiate. Here are things you need to know before renting commercial property.
Contract Should Fit The Business
Before signing the contract, you should at least try to understand what’s written in it. Carefully investigate and make sure the agreement meets your business. First and the primary thing you should do is to check the amount of the rent and make sure that you can afford it.
Second is the length of the lease. You wouldn’t know it but, your business may grow faster, and a need for a new property is needed. Also, some businesses’ location might not work out, so the best and safest way is to agree on a short-term lease with renewal options.
You should ask the property owner on how they will calculate and measure the chargeable square footage so that you can compare between buildings.
Term of Leasing
Ask the proprietor when does the least start, and will it expire. Decide if you want to have a long-term lease or shorter-lease with renewals. A long-term contract is a better deal for some businessperson.
Some landlords will base on their own needs, considering their debt on the building and the lenders’ requirements.
You have to know the allowable rent increases or also called escalations. Don’t forget to ask on how they will be computed.
Rent Extra Cost
Advance Payments and Security Deposits
Just like apartments, property owners or landlords may ask for advance payments for the first and last month’s rent. Also, ask the proprietor for the security deposit and the conditions for its return.
The landowner often pays the costs for improvements. Both of you should decide who will pay for the improvements and who will own it after the end of the contract.
The contract should include the maintenance and repair, and who will be responsible for it. Including the air conditioning and heating systems.
Do you have the right to sublease? You have to know the conditions for it.
Renew Or ExpandDo you have the option to renew the contract? Or expand the space you rented.
Conditions of termination, notice requirements should be included, and if there are penalties for early termination.
These are the lists of critical terms you have to know when renting commercial property. One of the most important things too, when you got the property, is the maintenance of the place. It includes the air conditioning and heating systems.
If you don’t have support, you can visit Daikin They will provide you with the best support and maintenance for your company.