Tracking down the perfect commercial space for your next business idea is exciting but nerve-wracking. Commercial real estate demands a huge investment, often before your business makes any money. Finding the right space at the right location for the right price can often be the defining factor for a business’ success.
So how can you make sure you choose the right place? The following guidelines can help you negotiate the best deal for your new commercial space.
All commercial terms are negotiable
Many first-time business owners are unfamiliar with negotiating the terms of a commercial lease. These complex legal documents cover many aspects of property management, including taxes, utilities, maintenance, and more. Many business owners have more success negotiating favorable terms by working with a local attorney well-practiced in Louisiana real estate law.
An attorney can help review a lease and negotiate the following items:
- Length of lease: The length of the lease is central to most negotiations. Landlords typically allow tenants more concessions in exchange for a longer-term lease. Most commercial leases run about one to two years with renewal options included. A shorter lease allows you to evaluate the location’s quality and make changes if needed.
- Cost of rent: A lawyer can help evaluate nearby commercial rents to ensure the offer’s fairness. Negotiate rent increases, their timing and include caps on their percentage. Landlords may fold in utilities with rent or require tenants to pay property taxes. Compare budgeting and projected sales to make sure you can afford the monthly total.
- Property maintenance: Your lease will define who performs property maintenance like snow shoveling, plumbing, electrical work, and repairs. Your lawyer can help include monthly dollar amount caps for basic maintenance and identify any “hidden costs.”
- Favorable clauses: Landlords include many provisions that specifically favor them, so do not overlook these sections. Include clauses that favor you during unexpected business stoppages or “acts of God,” including disease, pandemics or public health emergencies. Include non-compete clauses to prevent competitors from entering the same business park, subletting permissions and the process of dispute resolution.
- Termination: Including specific terms for ending the lease, especially concerning a tenant’s ability to cure a default before eviction.
Shopping for a new commercial space? Consider legal counsel
Entrepreneurs looking for a new business space find more success in working with a Louisiana lawyer familiar with real estate law. An attorney can review all clauses and conditions, negotiate favorable terms and draw up a lease ideal for both you and your business.