When entering into a commercial property lease agreement, it’s crucial to pay close attention to certain clauses in the contract, some of which require particularly careful consideration before signing.

The Actual Rent

The precise rental amount is a primary component of a commercial lease, especially for smaller businesses. While the base rental rate may be set, this is often an area where some negotiation is possible.

Rental Increases

Understand the details of any rent increases, including the amount, the effective dates, and the basis for these increases (e.g., Consumer Price Index, fixed percentage).

Deductions for Tenant Improvements

Clarify whether any improvements you make to the property will result in deductions from your rent payments.

Landlord’s Operating Costs

Determine what percentage of the property’s operating costs (e.g., maintenance, utilities, property taxes) you will be responsible for covering.

Property Inspection

Before signing the lease, conduct a thorough inspection of the property. Document any existing issues, such as necessary repairs or needed upgrades. For any pre-existing damage or faults, take photographs and inform the landlord in writing beforehand. This will prevent the landlord from unfairly charging you for these issues when you vacate the property.

Ensure Repairs are Completed Before Occupancy

Any agreed-upon repairs and upgrades should ideally be completed before you sign the lease or, at the very least, before you take possession of the property. The lease agreement should include specific details about these works, such as completion timelines. This is important to avoid potential disruptions or even closure of your business due to ongoing construction or repair work.