Attorneys Stephen Korshak and Lee Karina Dani

5 common commercial leasing issues to avoid

On Behalf of | Dec 29, 2021 | Commercial Real Estate |

Entering into a lease is something many business owners do. It’s an important process that you need to take seriously, because this contract may influence your business significantly for the term of the lease.

There are some mistakes that potential tenants may make that hurt their businesses and bottom line. It’s essential to avoid these. Here are five to watch out for.

  1. Not getting the space you expected

One of the first things to do when you’re looking at signing a lease is to make sure that the lease is for the space that you expected. Don’t assume that an outbuilding on a property is usable or that you get all the space in a building without checking the lease carefully. You may find that you’re only leasing a smaller office or that you can’t use a part of the property due to leasing restrictions.

  1. Not being able to use the space due to zoning issues

The next issue to watch out for is a problem with the zoning of the property. It is a tenant’s responsibility to check on the zoning of the space and to be sure that it is appropriate for their business.

  1. Being charged building operating expenses

Building operating expenses, like real estate taxes and utilities, can be extremely expensive for tenants. Ask for copies of tax bills and past utility costs, so you know what to expect if you rent a space.

  1. Subleasing issues that limit your business

Sometimes, businesses need to sublease spaces. For example, you may want to add a ministore inside your large retail business and be willing to sublease the space to do so. Make sure that subleasing is discussed in your lease.

  1. Unfair terms for a long-term lease

Finally, look at how long your lease is. You need to see if it’s long enough to establish your business. You also need to be sure you can extend your stay in the property if needed. On top of that, you should see if the rent will be fixed or renewed at higher rates, so you can prepare in advance.

These are a few issues common in commercial leasing. Be aware of them, so you can be sure the lease is right for your business.