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Things to consider before signing a commercial lease

| Aug 28, 2018 | Commercial Real Estate |

As a business owner in Pennsylvania, you have a lot to think about. If finding a new space is on the horizon, it is important you understand what you are signing when going over the lease. It is legally binding, and fighting one of its provisions after the fact usually does not result in a positive outcome for you. It is important to work with an attorney and go over every aspect of the commercial lease and negotiate before you make it official.

The Hartford discusses some of the basic considerations regarding a commercial lease. One is the term of the lease. While a longer term is usually cheaper over the long run, if you are just starting out you may want to sign a shorter lease in the event you go out of business or it grows substantially and you need a different space. The size of the space is important for many reasons. Make sure you measure the space yourself, as remodels can change the square footage and you do not want to have to pay for space that does not exist. 

There are three main types of leases. Make sure you understand what each one entails, as this can greatly affect your expenses.

According to Forbes, also closely review the operating expenses provision, which outlines above and beyond what your company’s expenses will be. Escalation clauses are also very common and can result in severely increased rent in future years. You and your attorney should make sure you negotiate a cap on this amount.

 

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