How can you make a commercial lease more favorable to you?

| Jul 31, 2020 | Business Law

As a business owner or manager looking for new facilities, you have a lot of considerations that will influence your final decision. The zoning of the area, the facilities available at particular properties and the terms of the lease offered will all influence the final decision that you make.

For some people considering a commercial lease, there may be an opportunity to negotiate better terms. What are the areas where people commonly seek concessions from a landlord when signing a new lease or renewing an existing one?

New or growing businesses might negotiate a shorter-term lease

It is common for commercial leases to run multiple years in a row. If your business is new and eventually fails, you could wind up with liability because of the unfulfilled lease. Your landlord may require that you pay the full amount of rent for the duration of the lease, even if your business is no longer operational. You could find yourself in a similar position if you outgrow a space.

Negotiating a lease that only lasts a year or possibly even securing a month-to-month arrangement could benefit you if you aren’t sure about how well your business itself will do or whether the facilities will fit your needs in the long run.

Landlords might be willing to reduce your CAM fees

Business models will have different needs for the shared facilities in a building. For example, a business that only has five employees will have substantially less demand for parking resources than a business with dozens of staff members or constant customer traffic.

Depending on the size and needs of your business, it may be reasonable to ask for a reduction in your share of the common area maintenance (CAM) fees because you simply won’t use the facilities as frequently as other tenants do.

Tailor the lease agreements to your business’s unique needs 

Many landlords, including those who rent out commercial properties, use boilerplate documents for their leases. In other words, they expect every tenant to sign essentially the same paperwork. Depending on your business, it may make sense to have a lawyer draft a customized rental agreement that focuses on the terms that matter the most to you as a tenant.

Although negotiating favorable terms as part of a commercial lease is often stressful, it can save your company money in the long run and set you up for success or at least reduce the risks of failure. In general, it is often in the best interest of those signing long-term contracts on behalf of their business to have an independent review of those documents before they commit to anything in writing.