Review Your Lease before signing

Negotiating the Lease - points to check
The important thing to remember when you are negotiating a lease is that the lease documentation would have been written with the landlord in mind - not you. You therefore have to read it well and have your lawyer check it over. A lot of success you will have with negotiation will depend on the real estate market at that particular time.

Naturally, if there are a lot of retail premises available for lease you will be able to negotiate a better deal. If there is a shortage then it becomes a sellers market and you will find it hard to obtain exactly what you want because the landlord can always go elsewhere.

The few points that you need to consider before signing include:

  • The longer the term of the lease that you are interested in, the better your negotiation strength will be as the landlord will be very keen.

  • Always ask for a rent cap. You need to ensure that the lease payment will not climb too high, outside of your budget.

  • Make sure that you have the option of subletting. You may find that your business is running into cash flow problems and you need to sublet part of the building in order to reduce your rental cost.

  • Make sure that you agree to everything included in the rent. Sometimes you can come out better if those items are dealt with separately. E.g. repairs, utilities, security etc.

Always Read the Fine Print
Make sure you have gone through your lease in detail before you sign it. If during your negotiations you find sections that are not agreeable then point them out to the landlord and make any amendments required.

If the lease was written with the landlord's interest in mind then you have to watch out for your own interests.

Some of the points that you need to be clear on with the fine print are:

  • Any limits to the use of the property.
  • Any limits to alterations on the property.
  • Any requirements where you leave the property as you took it.
  • Any restrictions on the renewal of your lease.
  • Any restrictions on being able to sublet if necessary.
  • Who looks after maintenance?
  • The charges involved from the landlord for any other costs that you do not know about.

See your Lawyer before you sign anything
It goes without saying that you must never sign a Lease document or any other legal paper for that matter until you have submitted it to your Lawyer for review and approval first.