Rent is a significant part of the business expense. But many lessors don’t negotiate their commercial real estate lease. It often leads to numerous hidden costs. If you don’t care, it can dent the profitability of the company. It is surprising that many businesses sign a lease without even reviewing it. They sign the lease given the landlord without even negotiating. Worse, some businesses don’t sign a lease altogether and rent the space every month. The run the risk of eviction on a short-notice and losing the money they had spent. A lease is needed to protect the business interest and to get the most value of any improvements made. Use the free California commercial lease agreement forms along with these tips to get better lease terms.
- Estimate the business space requirements
Do a little homework, list the company’s current and future space needs and determine the budget and the preferred location. If there is no clarity about the near-term needs, it’s best to go for a shorter lease. Although the per square feet price of the shorter lease may be high, it’s easy to end the lease.
- Understand the costs
Review the costs that are required to be paid. Ensure that the total costs fit the budget. If the base rent is going to be increased, the details should be part of the lease. It’s better to drop a mail for the requirements than being shy about it.
- Understand the Lease Options
Lease costs can vary significantly on the type of the lease.
Gross Net Lease – Rent paid covers the base rent and the cost of incidentals. It includes the utilities, property tax, insurance, maintenance, repairs and common area expenses, janitorial service, landscaping, grass maintenance, and property management. In modified gross lease, some of the incidentals are shared by the landlord.
Net Lease – In this form of lease, lessor pays the incidentals than paying them as part of the rent. In Net Lease, you will pay the base rent along with property tax or insurance or utilities. The landlord pays the rest.
Double Net Lease – You pay the base rent, property tax and insurance.
Triple Net Lease – You pay the base rent, property tax, insurance, and maintenance costs.
Include all Details in Lease Agreement
Free California commercial lease agreement is available online at various legal forms site. Sign up, start creating the agreement and enter all the details as required.