How can prospective tenants spot a poor commercial lease deal?

On Behalf of | Jan 27, 2023 | Real Estate

More business owners are choosing to lease commercial property instead of buying. A lease offers several advantages over purchasing, such as:

  • Tax benefits
  • Ease of relocation
  • Less upfront costs
  • Fixed monthly expenses

While the benefits of leasing commercial space can simplify your operational expenditures, not all leases treat tenants fairly. Learn how to spot a one-sided commercial lease before you sign the agreement.

Grammar errors and typos

Mistakes can happen, but if the lease contains numerous misspellings, typos and grammar errors, be cautious about the deal. If the property owner is careless with their documents, they may also be reckless in other ways that could compromise your business.

Vague responsibilities and terms

Every element of a commercial lease requires precision. The obligations of all parties should be clear and leave no room for misinterpretation. Many disputes between tenants and landlords arise because one party misunderstood part of the lease.

Avoids changing the agreement

Consider it a warning sign if the landlord agrees to continue negotiating the lease but wants to put it off until an unspecified time. Once some landlords lock in tenants, they may never revisit the lease or accommodate their tenants’ needs. They will simply get new ones if the occupants leave.

How can you protect yourself?

Always vet a commercial property and its landlord before you enter a lease agreement. Warning signs to look for include a high tenant turnover rate and lack of a Pennsylvania commercial activity (business) license.

Another way to protect your company is to have your real estate contracts and agreements reviewed by a legal professional. They know what to look for in a commercial lease and what to avoid.

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