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As excited as you may be to quickly do up the commercial unit you plan on leasing, and get down to business right away, remember that a wise tenant would take time to go over the fine print before signing the lease contract. This document will tie you down for a number of years, your business included, if it turns out to be one of those deals gone sour.
It would help a lot if you consult a lawyer, your business partners (if any) and any other person well-experienced in commercial property leasing. And do remember to look into the following:
• Think how the space will impact your business – for the long term. Ensure there is sufficient wiggle room for future growth/expansion, but not take up so much space that you end up with unnecessary space and expenses.
• How the base rent and future rental escalations will be computed as well as how a fair rent is to be determined in case of lease term extensions.
• Common Area Maintenance or CAM (operating expenses) and repair and maintenance provision. What are the average fees? How are they calculated? How about the annual increases (if any)? These are important questions to ask as this could eat up a large chunk of your income. Make sure maintenance and repair obligations are spelled out to prevent disputes in the future.
• Get to know the rules of assignment and subletting. This is not to say you intend to sublease on the outset, but making room for possible business concessions is always wiser than simply letting things happen as they do.
Other items worth noting include clauses in case of building/property damage and destruction, termination/relocation/expansion, and tenant improvements.
• Keep future space requirements in mind when leasing space
• Consult a lawyer or leasing professional to understand terms
• Clauses on what the landlord/tenant can change must be clear
Source: Lovely Claire CD, Special to Properties
The writer is a freelancer