Commercial real estate transactions can be complicated for all involved. It is important to carefully examine the lease agreement to see what revisions are necessary and then ensure they are made immediately. Whether this is your first lease agreement or your fifth, it is wise to take a critical look at all aspects of the contract before signing it.
Most documents will be written in favor of the landlord and his or her business interests. Certain factors can be revised, however, to take the best interests of both parties into account. While every situation is unique, here are three common mistakes that can have a negative impact on your commercial lease agreement:
- Failure to align business goals with the lease terms: While reaching the end of a real estate transaction can be an exciting event, it is wise to ensure your planning is not clouded over. Through the process, you must ensure your business goals and corporate strategies are not at odds with your real estate contracts.
- Failure to account for factors other than price: While price, ultimately, is the crucial element of any lease agreement, tenants must focus some attention on other factors. These factors can include accessibility, amenities, infrastructure, versatility and the flexibility of the space.
- Failure to ask about common area maintenance and repairs: While most agreements will contain language geared toward who is fiscally responsible for renovations, repairs or maintenance of common areas, it is crucial that the tenant thoroughly understands his or her responsibility in these matters. How will charges be accounted for? What is the timing of a reimbursement? What communication is needed to trigger repairs? Leaving these factors up to chance can doom an efficient operation.
Real estate transactions can be complicated by difficult provisions and restrictive terms. Additionally, any type of contract that relies on vague language can prove a challenge for commercial tenants. It is wise to carefully examine all aspects of the lease agreement before committing to it so you do not negatively impact your business.