Sunday, December 7, 2008

LEASING COMMERCIAL SPACE AS A TENANT: PART ONE

Startup and expansion of businesses often require leasing space for new locations. Because the lease represents a major financial commitment it deserves careful attention. Most proposed leases are drafted by and favor the landlord. The lease negotiation is the tenant’s time to understand and, to the extent possible, improve its provisions.

FIRST NEGOTIATE A DETAILED LETTER OF INTENT

Work with the landlord to develop a fairly detailed but non-binding letter of intent setting out all of the business terms that are particularly important to you, such as the lease term, options to extend the term, the location you would lease, the square footage of the space, the rent, parking available for you and your customers’ use, tenant improvements to be made and/or paid for by the landlord, preliminary approval of your signage and decor, and so on. If you cannot agree at the letter of intent stage there is no point in getting into detailed lease negotiations.

1 comment:

Eric said...

Valuable information indeed, may I also suggest the value of an architectural evaluation of any space prior to signing lease. There are many factors related to the building occupancy, path of travel and accessibility requirements that can greatly impact whether a building is truly suitable for a given tenant. I have a complete article on this

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