Commercial Leases – Watch Out!

by , on
November 15, 2016
Commercial Leases

A commercial lease is one of the most important, and sometimes scary, documents a new business owner will ever sign.  They involve complex terms, financial risk, and obligations you may have never seen before.  The first commercial lease my company ever signed was for a total value of $2.5 million dollars over five years.  At the time, it scared me to death.

With careful planning, however, a commercial lease can be a tremendous asset to your business, and as always, speaking to a qualified property lawyer is always a good idea.

Here’s a few things to watch out for:

  • The Money. You’ll be paying rent at regular intervals so watch out for a few things that will appear in this part of your lease.
  • Automatic rent increases. These are common in leases and can substantially affect your ability to pay (as well as the profitability of your business) over time.  Be careful to examine exactly how the rent increase will be calculated.   Try to anticipate the worst case scenarios and plan for them.  Be prepared to negotiate on this term, you do not have to accept it at face value.  Again, consulting with a competent property lawyer is a smart move.