Watch for Assumptions with Your Commercial Lease

There are potential dangers that a business owner opens themselves up to when making ASSUMPTIONS regarding what can be done from the location they've selected for their business. Zoning approval with the local municipality where the business operates will play an important role, but so will the provisions found within the commercial lease agreement that the business signs with their landlord. 

We're pleased to provide a couple of related tips in this POST from our friends, Dale Willerton and Jeff Grandfield with The Lease Coach. Thank you Dale and Jeff.

Dale Willerton

Jeff Grandfield

Negotiating Commercial Leases & Renewals FOR DUMMIES

Commercial Leasing Tips for Commercial Tenants

By: Jeff Grandfield – The Lease Coach

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:

Define the Use Clause: It is extremely important that the tenant’s Use clause be defined (with the Offer to Lease and the Formal Lease Agreement) to include ever possible product or service you plan to sell or offer. Don’t assume that if your primary Use is that of a hair salon that you can automatically add a tanning bed or if you a chiropractor you can automatically offer massage therapy. Exclusivity on your Use clause (i.e. you are the only one in the commercial property offering these products or services) is also important.

Is the Asking Rent Too High? Rental rates are set by landlords to achieve a reasonable profit. Many tenants incorrectly believe that the landlord wouldn’t charge more rent than the tenant could afford to pay. You must distinguish between affordable rental rates versus inflated rental rates. Many tenants learn the opposite the hard way.

For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to JeffGrandfield@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). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com  or JeffGrandfield@TheLeaseCoach.com or visit www.TheLeaseCoach.com.

                                                

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