As a tenant looking to rent commercial space, you have to make your way through a lot of financial and legal terms, documents, and requirements. Because landlords are in the business of renting space, they are fully aware of how to protect themselves legally and financially, and how to position themselves for the greatest profit. As a tenant, knowledge is what helps you level that playing field, and one of the best ways to gain knowledge is by asking the right questions.
In previous blogs we discussed some questions to ask before signing a commercial lease. In this article, we’d like to expand on that to explore five of the most important questions you should ask your landlord:
- Can I use my umbrella insurance policy to cover this location? If you are a tenant whose properties span multiple locations, you may have an umbrella or blanket insurance policy that covers all of them. Before proceeding with a lease for a new location, ask your landlord if that policy can be used to cover your occupancy and use of this new space.
- How are disputes settled? Sometimes even the most carefully thought-out leases and best of intentions aren’t enough to prevent a dispute between a tenant and landlord. Before signing a lease, it’s important to know how such disputes—whether they are about your liability for an expense, your desired usage of the space, or any other issue—will be resolved. Be sure that the method of dispute resolution is not only agreeable to you but clearly spelled out in the lease.
- What remedies are available to you as a tenant if the landlord fails to repair damage or perform needed maintenance? For example, if there is some interruption in maintenance usually provided by the landlord, like daily janitorial service, and you as a tenant have to step in and pay for services, can you deduct your expenses from your rent, or be reimbursed for them? What type of provision is made if you have to pay for an emergency repair?
- Does the lease give the landlord the right to require changes you may not have planned—or budgeted—for? For example, if you are planning to lease a space to fit out as dry cleaner’s or nail salon, can the landlord insist that you incorporate ventilation to a degree you may not have originally planned? Enhancements like extra ventilation or sound proofing are just a few things a landlord may request that you do. Before signing a lease, make sure you know how obligated you are to carry out and pay for those requests.
- What happens if your location’s visibility is compromised by changes made to the building or complex? If your landlord undertakes some construction or repair project, or makes some permanent change to the structure or layout of the building that temporarily or continually makes it harder for your customers to find you or access entrance to your location, what recourse do you have? Is there some provision for your loss in earnings due to changes the landlord makes to the building that may result in decreased visibility or access?
Navigating the world of commercial leases requires knowledge and expert help. At A.F. Alber, we partner with you early on in the process to provide help and guidance in site selection and lease negotiation, setting you up for a more cost-effective and profitable fit-out. Give us a call today to discuss your plans for your next commercial space!