Before signing a commercial lease, several matters need to be worked out. Don’t hesitate to ask questions, and insist the property owner or your real estate advisor go through the lease contract with you in detail. Here are a few common questions to ask the property owner before signing.

What to Consider Before Signing a Commercial Lease

How long is the lease?

It’s important that your lease doesn’t expire too soon. Negotiate for a reasonable time frame for the lease to allow plenty of time for your business to grow and profit.

Likewise, you don’t want to have a lease that will run for a decade if you’re building a startup in an uncertain market. Also, see if your real estate advisor can help negotiate a break clause in case you need to terminate your lease early.

Can I renew at the end of the term?

Negotiating a renewal can be just as important as the terms for the initial lease. The property owner is not legally obligated to offer to lease the property again after the contract expires.

Can I sublease?

You may have more space than you initially thought you would, or your business may expand rapidly and need a larger space, but you were unable to negotiate a break clause. In this case, you may want to sublease the property. You need to know in advance whether or not your landlord will allow it and if they’ll uphold the same terms for sublease tenants.

Who is liable for paying insurance?

While landlords should have comprehensive insurance policies that cover the physical property, they will also require you to buy commercial property insurance. These policies protect the property owner from financial damages, like an injured client or customer. 

Are improvements or modifications allowed, and, if so, who is financially responsible?

The owner may or may not be open to much modification of their property. Any necessary renovations should be negotiated upfront and recorded in your lease or in another legally binding contract. If not, your landlord will be less likely to pay for renovation work after you’ve already leased the property. 

If you’re still in the market for the right commercial space, contact Jeffrey Anderson Real Estate Broker in New York City. This real estate advisor has more than 14 years of experience as an urban designer and architect. His deep knowledge of the city’s real estate will help you find a prosperous location for your business. To learn more about his services, visit him online or call (917) 568-9642.