Tips For Negotiating Commercial Lease Agreement
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Rent is one of the significant expenses for
most businesses. A substantial portion of the income is spent on renting a
property. However, most businesses don’t negotiate the best lease agreement. A
well-negotiated lease does not only reduce immediate costs but also provides
long-term financial stability and flexibility. By strategically negotiating
terms, businesses can potentially lower their overhead costs.
Here
are a few tips for negotiating a commercial lease agreement:
- Assess your needs correctly
Understand your business needs carefully
before signing the lease agreement. Figure out how much space you will need in
the long term, team size etc to get the most suitable space for your business.
Consider a short-term lease if you are unsure about your long-term needs.
- Seek the opinion of
a lawyer
It’s always advisable to involve a lawyer
specializing in commercial leases to avoid any surprises. Let the lawyer
examine the terms, conditions and clauses in the agreement so you don’t end up
paying more or compromising on any of the facilities.
- Study market rents
Study current rent trends prevalent in the
market. It's crucial to gather market data on rates existing in the
neighbourhood and compare them with the landlord's asking rent. You can
negotiate more effectively if you have factual market data in hand.
- Know about the property
Understanding the condition and amenities of
the property will help justify the amount you are paying. If the property lacks
certain features or requires improvements, you can negotiate for a lower rent
or ask for concessions such as upgrades and renovations funded by landlords.
Gather information about the occupancy rates. High vacancy rates might give you
more negotiating power, as landlords may be more willing to lower the rent to
secure a deal.
- Review termination terms
You don’t want to land in any trouble when terminating the contract. This is
why it’s necessary to review termination terms. It protects your business from
unexpected costs and liabilities and provides flexibility in case of unforeseen
changes. By being aware of these conditions, you can negotiate better terms and
plan strategically for your business's future needs.
These are a few tips that will help you
negotiate a better deal when leasing a commercial property agreement. A clear
understanding of market
conditions and strategic foresight will help you choose a property that best aligns with your
business needs. Research is key here. It will help you secure a deal with terms
that are in your favour. Get legal advice from lawyers to ensure there are no
loopholes in the agreement. By following these tips, you can have a lease
agreement that supports your business's growth, stability, and success.
Article authored by: Team Proptranxact
Date: 12th July, 2024