Starting up a new business? One of the main things you need are premises from which to run it. You won’t generally want to buy such premises as that would be very costly. Leasing commercial premises is the usual way to find a good home for your enterprise. However, don’t go in and sign a lease unprepared. Unless you know a lot about leases there are too many things that can work against you. Hiring an experienced property lawyer to examine the contract and make any necessary changes is the best way to go.
A lease that is drawn up by the landlord will ensure that all his or her needs are met, but may be rather light on what the lessee needs so you need your own lawyers to look after your rights. If you have never leased before, you will most likely be unaware of what these needs are. And often the legal language is confusing, so you may not understand exactly what is meant by some terms or clauses.
Here are some of the things that can happen when you sign a lease without really knowing what it contains.
- The rent may go up in a year’s time, or it may be set to take a percentage of your income once it reaches a specified level. The latter means that you could be paying exorbitant rent in only one year.
- You may find that your lease only allows you to do only one thing. For instance, you may be allowed to sell hot pies, but if you decide to add pizza or coffee, you may not be allowed to, due to the terms of the lease.
- A large supermarket that draws in foot traffic to the mall is called an anchor tenant. If they close down or move, you stand to lose a lot of customers. Your lease should allow you the option of leaving before the lease is up if this happens. Otherwise you could be forced to remain in the mall with much less traffic and hence, custom; a sure-fire way to fail in your business.
- Many of the operating expenses such as maintenance and repairs for such a business are paid by the landlord. You need to be sure of what expenses will be yours as these can add a great deal to your operating costs.
- If the mall has frequent upgrades, you will have to pay for the cost of refurbishing your own premises to the standard required. However, you can negotiate the length of time between refurbishments; 5-6 years is a reasonable time and will save you money.
There are many other ways in which an experienced property lawyer can help you save money, so don’t sign that lease without their help.