A previous post on this blog discussed the difference between leasing commercial real estate or buying a property when a Philadelphia resident decides either to start up a new business or re-locate an existing one.
When it comes to leasing commercial property, it is important for those in the Philly area and throughout Pennsylvania to remember that commercial leases are not at all like the residential leases one might sign to rent an apartment or even a house. Commercial leases tend to be more prone to being negotiated, are typically longer in duration and have some added legal complexities to them that some people, who have to that point only rented for residential purposes, might find overwhelming.
Still, there are certain important elements of a commercial lease that aspiring entrepreneurs in Philadelphia can focus on when negotiating a new lease agreement. Perhaps most importantly, especially since the lease term may be longer, it is important for the prospective renter to know how much the rent is going to be, whether it is locked in during the term of the lease or can increase, how much rent increase one is exposed to and how many other costs the tenant is going to pay. For instance, will the tenant be expected to pay all utilities or kick in a share of the property taxes?
Another term one might not think to focus on is how the building will be maintained and who will pay the cost of doing so, as in commercial leases, the business tenant is more responsible for repairs and upkeep than in the case of residential leases. On a related point, it is essential that a tenant sign a lease that allows them the flexibility to use the property the way they need to in order to be profitable.
There are many other terms a business owner will need to focus on and straighten out before signing a commercial lease, which is why it is generally a good idea to involve an experienced real estate attorney in the process.