Whether you are looking for your first commercial space or you need to find a new space, the terms in your lease agreement could make or break your business. While every agreement is unique, certain items should be in every document. These terms protect both you as the tenant and your landlord.
One of the first terms you should make sure your agreement includes is the type of lease. The various lease structures impact how much you pay each month besides rent. For example, in a single net lease, you pay utilities and property taxes while your landlord covers insurance, repairs and maintenance. However, with a triple net lease, you are on the hook for all building costs, but the landlord usually stays responsible for structural repairs.
The agreement will also lay out how much you are paying in rent. Before signing, make sure you understand how rent is calculated. You also need to look for an escalation clause, which is what increases your base rent.
Other provisions you should look for
Besides the type of lease and factors affecting how much you pay for your space, there are several other sections you need to make sure are included in your lease document, including:
- Definitions
- Term of lease
- Use and restrictions
- What happens if one party breaks the agreement
You should make sure you thoroughly understand every area of your agreement before signing. Being in too much of a hurry to sign the agreement and move into your new space can make you miss important details that can have serious impacts later one. An attorney can guide you through the document and answer any questions you may have about what is in your lease agreement.