If you are preparing to sign an office space lease, it is important that you understand what you are agreeing to prior to signing. Commercial leases should explain your responsibilities and the costs you are responsible for. Read everything carefully.
Tips To Look for in a Commercial Lease
An office leasing agreement should contain at least the following ten things.
The Property and the Parties
Your lease should identify information such as who the tenant is, the property, and the landlord.
You should ensure that the property address and names match. If you are signing a commercial lease and have a business entity, you will want to make sure that you name the business instead of personally naming yourself as the tenant. This will help keep you protected against liability if something were to occur.
Lease Term
When looking for an office space for rent, you want to be sure that your lease includes the lease term. This is the amount of time you are allowed to legally occupy the property and pay for rent. For many residential leases, the term is typically one year. Commercial leases normally have multi-year terms.
Lease Extensions
Most residential leases state that the lease will convert to a month-to-month tenancy once the original lease has ended. This means you can continue to live and pay rent on the property, but you must give at least 30-day notice when you leave.
Commercial leases are likely to expire at the end of the term but can normally be renewed for an additional period of time.
Rent
Your commercial lease will also state the amount of your rent and the date it is due each month. Make sure that the amount stated is what you are expecting to pay. Additionally, you want to be sure you pay attention to any fines and penalties that may accrue if you don’t pay on time.
Security Deposit
Many leases will require you to pay a security deposit that the landlord will hold on to in the event you cause any damage. It is normally equivalent to one month’s rent.
Utilities
A residential lease should state who is responsible for paying for utilities, including gas, water, trash, and electricity. Commercial leases may use the term “triple net” to describe the tenant’s and landlord’s responsibilities. A commercial realtor can also help you understand what your responsibilities are.
Pets
If you have any pets, make sure your lease allows them. This typically has nothing to do with commercial leases, but it is still a good idea to ask.
Other Rights & Responsibilities
Your lease may also state that you are responsible for certain maintenance issues such as lawn care and snow removal. It is important that you read through these restrictions carefully.
Subletting
Most leases will not allow you to sublet the property or reassign the lease without contacting the landlord first. This means you can rent the property to another person if you no longer want to remain there.
Insurance
Finally, you should know that the landlord’s insurance will not cover your belongings. Your lease may require you to obtain commercial insurance. It’s a good idea to review your lease and contact an attorney prior to signing it.
