22 Important Questions to Ask Before Signing a Commercial Lease
Author: Amanda Trapp
Opening a new location or moving your business into a new space can be an exciting milestone for your company. Without careful preparation, however, it can also cost your business thousands of dollars or even more in unforeseen expenses. Too often, business owners only begin asking important questions after it’s too late to solve the problem. Business owners can save themselves and their company a great deal of pain and expense simply by asking a few important questions before signing the lease.
- Is the space built out? If not, when is substantial completion? What happens if it’s not completed on time?
- When is your move-in date, and when is the first rent payment due? (“First month free” often means the landlord extends your lease another month.)
- How do you get out of the lease? Can you sublease or assign it?
- Do you have the requisite insurance? Can you negotiate it? Does the landlord have enough insurance to cover any unforeseen emergencies?
- How much is the deposit and when do you get it back?
- Common Area Maintenance charges—What’s included? What’s excluded? Can you audit the books of the landlord?
- Will you be charged percentage rent? Why should you give your profits to the landlord?
- In a “slip-and-fall,” who’s responsible for the medical bills and other costs?
- Are you limited in your “use” of the premises? Can your biggest competitor move in next door?
- When can the landlord enter your space without your permission?
- Can you make changes to your space?
- Who is responsible for paying the utilities/water/sewer bill?
- What happens when the next hurricane hits?
- Parking: There’s never enough. Where do your clients park when the lot’s full?
- Can you “hold over” after termination of your lease?
- Can you offset the costs of repairs you make to the amount you owe landlord?
- On the weekends, will you have A/C or heat? Will the elevator work or do you have to climb the stairs? What services will the landlord provide?
- Do you have an option to purchase? Is this important?
- Does your lender have a security interest that supersedes your landlord’s security interest in your personal property?
- Who owes the real estate agent the finder’s fee?
- What happens if the landlord refuses to make repairs?
- What services will the landlord provide? Exterminator? Change of light bulbs? Janitorial service? Window washing?
- What security is provided? Do you need additional?
The answers to these questions can have a major impact on the success of your new location. If you’d like to know more about how your business can avoid as many potential liabilities as possible during the term of your lease, contact Stibbs & Co. today. Our experienced legal team is standing by to help your company enjoy a relaxed, confident moving day with no nasty surprises to follow.