Whether signing a new lease or renegotiating an existing one, there are lots of different factors that retailers need to consider. It’s a serious financial commitment that shouldn’t be entered into lightly. It’s paramount that you know what you’re signing; do you understand and agree with the terms that are laid out?
Have you considered the following information before putting pen to paper?
Before signing the lease to a property, you need to be certain that you’ve chosen the right location for your business. For a lot of retail companies the location is extremely important – it can actually make or break your business. Therefore you should take the time to pick out the best location.
What other shops are around? Are you too close to a competitor? Is there easy access to the premises? Is there parking space? These are all questions to ask yourself before signing anything.
The rent of the commercial property is probably the single most important factor when it comes to saying yes. It’s essential that you have considered everything in relation to the amount of money that you will be spending.
Will you be paying weekly, monthly or quarterly? Are you entitled to a rent free period so that you can make the necessary repairs?
Be wary of any hidden costs that might not be revealed initially, such as service charges or maintenance charges. Will you benefit from paying a service charge? If not, don’t agree to it!
Again, we encourage you to negotiate. Research other rents and compare them to your store.
The length of the lease should be one of the first things you check when looking at properties for your retail business. This means that you should be clear on the minimum and maximum length for that specific location.
You will be faced with a choice between a short term lease and a long term lease. A shorter lease will offer you the flexibility to move if your circumstances change, whilst a longer lease means you can be comfortable knowing you have the space for a prolonged period of time. For new businesses, we would recommend sticking to a shorter lease.
Don’t be afraid to negotiate!
The Responsibility of Maintenance
Lastly, you need to find out your rights and obligations when it comes to the Commercial Property lease agreement. Are you responsible for any repairs during the entire duration of your lease? Is it your responsibility to keep on top of the maintenance?
These are all things that you will need to negotiate with the landlord before signing your lease. You should avoid agreeing to having all the responsibility for repairs – you want this to be shared between you both.
You should also find out what happens at the end of your lease. Do you need to restore the property to the same condition it was at the very beginning of your lease? If so, make sure you take photographic evidence of any existing problems – this will avoid you having to pay out large sums of money later on.