Many business owners opt to sign a commercial property lease for their office or retail location. A cost-effective alternative to buying, leasing also allows you maneuverability should your business outgrow the space. While a commercial property lease resembles a residential lease, it is often longer and more complicated. Here’s what you should ask before signing.

5 Important Items to Look for in Your Property Lease Contract

1. What needs clarification?

Read through the contract, making sure you understand any key definitions or terms. Check specifically for fee inclusions, limitations on usage of premises, and penalties for any breaches of contract that may lead to unexpected costs. If a clause is unclear, ask for further explanation.

2. Are the terms of the lease negotiable?

Often, yes. Discuss with your potential landlord the length of the contract, required guarantees, or other concessions, especially if you are leasing for a substantial amount of time or money. Make sure that negotiated terms are included in the revised contract.

3. Who will handle repairs?

Being responsible for major repairs and replacements, including HVAC, can be expensive, so discuss compromises with your landlord. Have a surveyor check the property before move-in, to identify any structural problems and to document the location’s current condition in case the landlord insists on a costly repair.  

4. Can the lease be assigned?

A time might come when you need to sell your business, which would require assigning your lease to another party. Clarify your ability to assign a lease with your landlord or have the provision removed entirely if you plan to sell shortly.

5. What insurance coverage is required?

Most landlords will require you to have general commercial liability insurance (GCL) to help cover the cost of damages; however, some landlords may also ask for business interruption service insurance, so that they can file a claim to be reimbursed for your rent in the event your business operations are halted by outside forces, such as sewer repair or electrical work.

Protect your business by having the client-focused team at NAI FMA Realty assist with your search and the negotiation process. These property-leasing experts have the unmatched expertise and unparalleled local knowledge of Lincoln, NE to discover the best business space for your needs. Call (402) 441-5800 to schedule a consultation or visit their website to view their current listings.