According to the National Association of Real Estate Investment Trusts (NAREIT), the overall value of the US commercial real estate sector is around $16 trillion. It is easy for businesses to become overwhelmed while searching for commercial real estate with so much competition.
Examine the Lease Agreement Thoroughly
When commercial renters look for a new property, they frequently prioritize location and rental rates. This is hardly unexpected given the importance of pricing and location in business. Too often, company owners ignore the need to thoroughly reading their lease agreement. The specifics of your commercial leasing agreement are essential, and if an issue or disagreement develops, the lease will govern your rights. Before you sign the dotted line, have an expert business lawyer evaluate your commercial leasing agreement.
Be Aware Of The Risks Of Liability
One of the most fundamental aspects to consider when considering a business leasing arrangement is your liability risk. Commercial landlords frequently attempt to shift a substantial portion of the liability risk on their tenants. If you neglect to study the exact provisions of your lease agreement thoroughly, you may be taking on considerably more obligations than you are comfortable with.
Common Area Maintenance (CAM) fees are something to keep an eye out for. CAM charges, sometimes known as a triple net lease (NNN), are fees paid by the tenant to the landlord to cover the costs of certain day-to-day activities. If you share shared space with other commercial tenants, your CAM payments should be proportionate to your overall rental responsibilities. CAM fees may cover things like common area garbage disposal, landscaping, and elevator maintenance.
Another fundamental contract condition to keep an eye out for concerns repairs and improvements to the business property—but only in your unit and shared spaces. Check to see if the homeowner has the authority to pass on maintenance and upgrade charges to your company. If you pass on repair and improvement charges, you should specify how such costs are charged. It might be in the form of lump-sum payments, or it could be spread out over several years.
Know Your Right To Negotiate A Business Lease
When a business landlord offers you a lease agreement, you have the right to study the contract’s express provisions. Some business leases are negotiable, while others are “take it or leave it.” Regardless, you must contact a California attorney who can assist you in reviewing the lease and advising you on the meaning and consequences of the provisions.
You may be able to recommend changes to lower your overall level of risk. Alternatively, you may wish to consider purchasing supplemental insurance to provide further liability protection.
Your lawyer can assist you in negotiating a final lease agreement that provides a reasonable rental cost while also protecting you and your organization from undue liability concerns.
Contact Hecht Schondorf for legal help today.