What You Need to Know Before Signing a
Commercial Lease

Do you need to consider a commercial lease? Many small businesses have been started right out of the owner's living room, basement or garage. Eventually though, many of these owners decide that they need to obtain commercial property for their new enterprise. If you're about to take the plunge and sign the lease on commercial real estate, tread carefully! You could hurt yourself financially, and maybe even destroy your business otherwise.

Here is a list of important things for a person to consider before signing a lease:

What is the total amount of square footage that you're renting?

Is this amount is clearly stated in the lease?

What is the duration of the lease? Are there any special terms or obligations related to lease renewal?

Does the property you are interested in really meet your needs (adequate storage, accessible to foot traffic, etc)?

Is the property in good repair?

Is your use of the property strictly limited to the use that the lease states? Or are exceptions possible?

Who will be responsible for repairs - You or the landlord?

What are your rights if the landlord fails to meet his repair / maintenance obligations? For instance, can you make the repairs yourself and bill it to the landlord?

Are charges for common area maintenance (CAM), if applicable, included in the lease? Are these charges made in addition to the rent, or are they included in the rent?

Are there any hazardous materials on the premises?

Are there any janitorial services included in the lease? How often are these things done (for instance, how often are waste baskets emptied, windows washed, etc.?).

What options are available to you, the tenant, if these janitorial services get interrupted for some reason?

Are you allowed to use a blanket insurance policy which will also cover other premises that you may own or lease?

Does the lease define in clear terms how any dispute will be settled?

If the property is in a strip mall or office building, are competing businesses excluded from leasing space there?

When does the landlord expect rent to be paid? Are there penalties if rent is late?

What, if any, application fees are there?

What utilities are included in the rent?

What additional cost for utilities can you expect for the property?

Where is parking for the building? Will it be sufficient to accommodate your customers? Are there parking fees that you will be required to pay?

Armed with answers to all of these questions, you should be prepared to make a good decision regarding the property.

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