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What should you look out for in a commercial lease?

On Behalf of | Nov 1, 2021 | Commercial Real Estate |

You think you found an ideal commercial space for your business, but you want to protect your commercial interests. What red flags could a commercial lease contain?

Forbes explores problem areas in business leases. Educate yourself on these pitfalls to start your company on a sound foundation.

Lack of a non-disturbance clause

If the space you lease goes into foreclosure, it may cancel your agreement with the landlord. Because landlords do not include their financial standing in lease agreements, ask for a non-disturbance clause on your contract. That way, you have one less thing to worry about if a lender forecloses the space.

Landlord money problems

Pay close attention to how a commercial property looks before signing a lease. Signs of disrepair and neglect, multiple vacancies and non-paying tenants could indicate financial trouble. If the person renting the space seems too eager to make a deal, it could be time for due diligence.

Muddy charges

Does your lease break down net charges and the procedure if the property owner defaults? The agreement should list every charge you must pay, and you should have the option to audit those charges. Check that you have legal protections if the landlord does not handle maintenance and repairs.

Vague responsibilities

You should understand your and the landlord’s responsibilities. For instance, does the agreement contain net lease charges? If so, when must you pay those charges? Consider asking an experienced professional to review the agreement before you sign it.

You need not take unnecessary chances with your business or the money you invest in it. By understanding commercial lease red flags, you give yourself the gift of peace of mind.