Checklist: Commercial Leasing Agreements

April 10, 2018 | Commercial Real Estate

Image of a commercial leasing agreement, glasses and laptop | Commercial leasing checklist

Real estate is often one of the biggest expenses for a commercial business. So, you can’t be too careful before signing your commercial leasing agreement.

Making the wrong decision could hurt your company in the long run if your commercial lease terms are not flexible or you do not get what you need. In fact, just one paragraph of ambiguous language in a commercial leasing agreement can spark years of stress and may even lead to litigation.

So, if you’re ready to sign a commercial real estate contract read through this checklist to ensure you’ve dotted your I’s and crossed your T’s…

Commercial leasing checklist

  • What is the duration of the lease? What is the ideal lease term for your line of business?
  • When the lease expires, what are your options? Will you have an option to renew at the end of the lease term?
  • How will your rent be calculated? Is it net or effective?
  • Are you entitled to an incentive? If so, what type (rent-free period, rent abatement or fit-out contribution)?
  • Will any other fees apply to your lease agreement?
  • What does your lease include? Who will be responsible paying for taxes, insurance and other outgoings, such as council and water rates?
  • Who owns the building? (If the owner is not local it could be tough to get in contact with them for repairs and maintenance requests)
  • Who is responsible for maintaining the premises (including its fixtures, fittings and equipment)?
  • Who will pay for the lease set-up costs/legal costs?
  • Do you have a make-good clause in your agreement? If so, what do the terms stipulate?
  • When and how can the rent be reviewed and changed?
  • If your lease includes an option, will the rent review be a face or effective rent review?
  • Does the commercial leasing agreement allow for early termination, right of assignment or the right to sublet clause?
  • Is there a Permitted Use clause that outlines how you can use the premises?
  • Are you required to get permits, registrations or other licences to lease the property?
  • Do you understand all the terms used in the lease?
  • Have you negotiated the best deal possible?

Speak to the commercial leasing experts

At Tenant CS, we represent tenants, not landlords. With our help, you’ll sleep well knowing that you’ve explored all of the market alternatives, negotiated the best commercial lease terms possible and pursued the right option for your business.

An initial conversation to find out how a tenant representative can help you is quick and free! So, contact the team at Tenant CS today.

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The Author

Francois is a highly skilled tenant representation specialist, who brings a wealth of experience across various real estate markets.

Francois has a Masters in the Science of Management from Montpellier Business School (France) and a Bachelor (Hons) in Business Studies from De Montfort University (UK).

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