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How to negotiate lease terms for commercial property

On Behalf of | Jul 7, 2016 | Uncategorized

Missouri entrepreneurs who are starting their first ventures may be unaware that negotiating the terms of commercial leases is a normal practice. Unlike residential rental agreements, commercial leases are normally not standard. When the local market is not hot, it is possible for business owners to negotiate many different parts of their leases to make them more favorable to them.

The rent amount is one part of the lease that might be negotiated. Landlords calculate the amount of the rent based on a calculation per square foot. It is sometimes possible to negotiate a lower price per square foot with a landlord. Another option is negotiating whether or not the utilities, insurance and taxes for the property will be included in the rent or if the landlord will agree to pay those items.

Business owners would be wise to ask that their landlords give them a two-year grace period on rent increases and then to cap the percentage of increase that would be charged once the grace period expires. It is often possible to negotiate the length of the lease term. Landlords may be more willing to compromise on other terms of the leases if the prospective tenants are willing to sign longer leases.

Negotiating the terms of a lease for commercial property is an important way that a business owner may be able to save money for his or her business. Some business owners may want to enlist the help of theirattorneys for the negotiation process. Attorneys will understand the legal terminology that is included in commercial leases. This may help them with negotiating with the property owners in order to secure lease terms that are more favorable for their clients.