One of the strategic moves being employed by both well-established companies and start-up ventures is leasing. When done right, it can save a business significant investment on fixed assets, as well as avoid long-term risks and obligations connected with property ownership. However, although leasing a commercial property can be beneficial, it is highly imperative for a business to understand how it works so that they will be able to reap its benefits.
Truth be told, entering into a leasing contract is not an easy task. In fact, most terms of the lease that you may agree on can impact your operations and the success of your business in the long term. But with thorough about the process, you will be able to gain the upper hand in the deal.
If you’re a business planning to lease a commercial space soon, you need to know the factors you should look when evaluating the physical space. More importantly, before you ink the contract, make sure you review the basic terms indicated on the contract of leases such as the amount of rent, the duration of the lease, and the configuration of the physical property.
To help you out, here is the list of items that you should look for in a commercial lease contract:
- The length of the lease – when it will start and whether there are renewal options.
- The amount of rent.
- The type of lease: gross lease, wherein your payment includes items such as insurance, property taxes, and maintenance cost; or net lease.
- The amount of security deposit and conditions for its return.
- The type of property you are leasing, and how the property-owner measures space.
- The modifications and other improvements added to the property and who will pay for them.
- The party assigned for maintenance and repair of the systems installed on the space.
- The option of whether the property can be assigned or subleased to another subtenant.
To learn more, check out the infographic below from Amorys Solicitors which listed out the top essential questions a prospective tenant should ask before leasing a commercial property.