When I got together this week with one of the new business clients I'm coaching, it didn't take long to see that they were more than a little stressed!
There's no arguing that starting a business can be an emotional rollercoaster. Now add in the pressure of a long-term financial commitment with a commercial lease, and that takes things to a whole new level! Fortunately we found a way to significantly improve their position and greatly decrease the risks they'll now face.
To help all of us improve our position within a commercial lease, here are some valuable tips and suggestions from our friends at The Lease Coach! At a time when business owners in many markets are experiencing significant challenges, as well as new opportunities, it can be very helpful to engage the expertise of experienced professionals in those areas where they can add great value.
Thank you Dale Willerton and Jeff Grandfield for once again offering some very helpful insights for our "Business Success" audience!
For many business-owners, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While an entrepreneur focuses on marketing and managing, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate.
As explained in our new book, Negotiating Commercial Leases & Renewals For Dummies (co-written with my colleague, Dale Willerton), tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for an entrepreneur as the amount of rent he pays will directly affect the business’ financial bottom line.
Whether you are leasing a new location for the first time or negotiating a lease renewal for your business, these are some money-saving tips for tenants:
Put Your Meeting in Writing: Sometimes you will develop an understanding or handshake agreement with the leasing agent, property manager, or landlord. Any of these individuals may be reluctant to put that agreement in writing – so you can. As soon as possible after making the verbal agreement, send a basic latter or e-mail stating Further to our meeting (of such date) it is my understanding that … and then list the agreement made. Ask for a reply as confirmation so that you have something in writing. While not legally binding, this communication shows intent.
Off-Season Rent Relief: Will your company experience a slow period or off season at the same time each year? If so, try to negotiate some rent relief for those specific months. Naturally, it’s best to make those arrangements of signing the initial lease agreement (or your lease renewal). The best way to approach this subject is openly. It’s a straightforward problem that can be solved by reducing the rent during certain month … even if it means you are paying slightly rental payments during other times of the year.
Hold Back Your Deposit on Offers: Most Offers to Lease state that the deposit is due at the time the tenant signs the Offer to Lease. Giving an up-front deposit will minimize a tenant’s effectiveness in future negotiations. Instead, modify the clause to say that the deposit will be paid 72 hours after the landlord accepts the Offer. Another option is to make the deposit due and payable once you and the landlord have both removed your conditions, or upon signing of the Formal Lease Agreement by both parties.
For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to DaleWillerton@TheLeaseCoach.com.
Jeff Grandfield and Dale Willerton - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013).
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