Womens Guide to Negotiating a Commercial Lease

Womens Guide to Negotiating a Commercial LeaseWomens Guide to Negotiating a Commercial LeaseWomen should not be intimidated by negotiating a good deal in commercial leases,but negotiating starts with asking the right questions. Once you have answers to the right questions, you can research the types of leases, leasing terms, and best negotiation methods. You will also be better able to plan your finances and your negotiation strategies if you know what questions to ask. There are many questions to ask before leasing a commercial property. However, you should include three very important questions to avoid overpaying for geschftsleben space. What Type of Commercial Lease Is Being Offered? Thetype of leasebeing offered is probably the most important eintrag to consider first because it determines how you will be charged rent. The terms ofcommercial real estate leasesare defined by thetype of commercial lease. Some commercial leases are straightforward, but most are not. If you do n ot know what aTriple Net Leaseis, or what Load Factor means, or how your rent will be calculated (it is rare that you will be charged only for the actualsquare footageyou will occupy), you cannotnegotiate better terms. Is the lease full service or percentage based? The key to negotiating terms of a lease may be contingent on first negotiating thetype of lease. Ask to see a copy of a sample lease. A landlord who refuses to allow you the time to review lease terms before signing is not one to be trusted. Commercial leases can be just a few pages but are typically 15-20 or more pages in length. If you require a lawyer to review the terms and the landlord refuses, do not sign the lease Types of Commercial Leases There are manytypes of commercial leases and some terms may overlap. However, certain terms, such as services (e.g., janitorial or utility), applicable to one lease may not apply to another. Therefore, it is important that you specifically understand the type of lease, as well a s if it includes services, load fees, percentage fees, or other fees. Types of leases typically offered incommercial leasinginclude ersatzdarsteller net leaseFully serviced leaseGross leaseNet leasePercentage leasePercentage rentRentable square feetSubleaseTriple net lease (also known as NNN or net net net lease) Are the Terms of the Commercial Lease Negotiable? All commercial leases shouldalwayshave at least someroom for negotiation. A completely inflexible landlord is someone you do not want to lease from because inflexible often equates with unreasonable. If a landlord is unreasonable duringlease negotiations, they may also be unreasonable or unfair once you are in the space and need repairs or consideration for unforeseen items such as more parking, access to equipment, or telephone rooms. Negotiable termsinclude the length of the lease, free rent,smaller security deposits, and concessions for the tenant upgrading the space. Other areas typically negotiated in commercial lea ses include lower rent, caps on rent and load increases, and reduced or eliminated fees. When there is absolutely no room for negotiation, you immediately know two things Your landlord is unreasonable and you can probably do better elsewhere. Sometimes the best way to change the terms of a lease is to first negotiate thetype of commercial lease. For example, atriple netlease requires tenants to always pay all or part of the taxes, insurance, and maintenance associated with useof the property. These fees are paid in addition to the tenants regular monthly rent. If you do not want to pay all these fees, you should ask for a different type of lease. What Insurance Coverage Does the Lease Require? Few business owners new to commercial leasing will look beyond their actual monthly rent and utility costs when determining if a space is affordable, but you also need to consider your insurance costs. Moving from ahome-based businessto a brick and mortar space will increase the cost to in sure your business because, in addition to your owninsurance needs, your landlord will probably require you to purchase insurance to protect them as well. As long as you occupy the space, you will need insurance coverage, which becomes afixed expensealong with your other rent expenses. How Much InsuranceWill You Need? Make a point to ask what type and amount of insurance coverage is required by the lease. This may seem like an unnecessary question, but manysmall businessesare uninsured or underinsured. Commercial general liability (CGL) insurance offers the landlord protection from being sued under certain situations and this should be spelled out very clearly in your lease. While CGL insurance offers you some protection, the landlord requires it to protect their own interest, not yours. Some landlords requireinsurance coveragethat may be expensive, or worse, coverage that you cannot get. While most businesses can get CGL insurance, if a landlord requiresproduct liability insura nce, some businesses may have troublefinding coverage, or coverage could add thousands of dollars to yourinsurance bill. Is Insurance Required Prior to Moving In? You should also know in advance if the insurance coverage must be in place before you can move in. Most landlords will require that you have a minimum (that they set) of CGL insurance prior to handing you keys to the space.