How To Negotiate A Lease For A New Office Space
You have finally found the perfect office space for lease. The next step is to discuss the lease terms with your landlord. By this stage, after going through various trials and experience in search of office space, you know that you need to carefully verify and discuss the lease terms with the landlord before making any final decision.
Why do you have to negotiate lease terms?
Generally, it is essential to be prepared for current requirements, future plans, differences between two parties, and understanding and adjustments.
It’s common to have an agreement between two parties in business to keep things smooth and avoid conflicts. However, it is not necessary for both the parties to agree to all the lease terms as it is written.
You can negotiate on the terms of lease if the mentioned terms needs change. However, remember that the lease terms should be agreed to both parties’ benefits.
Many of us might face such situations where we have points to discuss but still need guidance on ‘how to negotiate an office lease’. Being a commercial office space provider, we have come up with a few lists of lease terms and lease negotiation strategies that might help you.
Tips For Negotiating Your Commercial Office Lease
Know Your Needs
Be clear with your needs such as the size of the office space, your future expansion plans, employees’ commutation, business exposure opportunities, and more.
Do Your Research
Research well before fixing your new office space. Your research must include: the location, amenities, infrastructure, rent, availability of healthcare center, restaurants, cafés, accommodation units, and transport facilities.
Assess Your Business Needs
Analyze your business’s long-term goals and growth plans. Discuss with your landlord about the requirements you might need in the future that might include machineries, electrical systems, and renovations.
Seek Professional Help
As a business owner, you might not want to go for negotiations. In such case, you can hire professionals who are familiar with lease negotiation strategies. They might come up with new negotiating terms if you have missed it. This could be an advantage in saving time and leasing the best office space.
Verify The Laws
You might have read your landlord’s terms and discussed with your professional lease broker, but it is important to verify the laws with a licensed lawyer. Leasing should comply with legal laws and regulations. Thus, you can avoid any legal issues in future.
Negotiate
Either you negotiate or hire a professional to negotiate your new office space. However, remember that you must read your lease terms clearly and gather all your requirements and papers during negotiation. Create mutually favorable lease terms before signing up.
Avoid Added Provisions
Your landlord will also follow lease negotiation strategies for his own benefit. Carefully consider about his extra provisions offered. Try to avoid provisions like,
- Leasing office space as it is without any interior and exterior customization.
- Responsibility of hiring and retaining security and maintenance from landlord.
- Responsibility for any damage due to natural calamities and disasters.
- Responsible to pay additional tax for building and other infrastructure taxes.
- Giving landlord the right to terminate lease anytime without notice.
Be Careful With Lease Termination
Carefully consider and discuss about lease termination. You need to mutually agree on deposits and returns during termination, building handover, and other special circumstances that can arise during your office space leasing.
Personal Guarantees
Avoid personal guarantees demanded by landlord. Some landlords might ask you or any of the directors to provide personal guarantee for the property and leasing. Avoid such terms to protect yourself from any liability.
Property Insurance
If your landlord includes in the terms that you must take up the commercial office space property insurance during your leasing, say no to such terms. It might cause you additional burden and expense and it will not go into your rental amount. Avoid such added and unnecessary expenses.
Deposits and Rentals
Research and verify market commercial office space deposit rates. Some landlords might ask for more than the standard market rate. Go with the standard rate to avoid extra burden during your initial period.
Vigilant About Hidden Costs
Carefully verify and cross-refer your lease terms and conditions for any hidden charges that might apply. Do not sign the lease immediately after the negotiation. Take time to once again verify on all the discussed terms and legally verify before signing.
To conclude, office space leasing is no easy task to complete in a day or two. You must be prepared for research, negotiation period and legal confirmations. Carefully considering your lease terms will give you a peaceful and comfortable leasing period. When you are occupied with other business activities and not able to afford to make all the necessary preparations, then hiring a lease broker is the best option. Visit Empower Real Estate website to find your right office space and clear leasing options.
FAQs:
What Is a Lease Negotiation?
A lease negotiation is the term used to describe the process of negotiating and agreeing with the lease terms and agreements between the landlord and the tenant about the rent, infrastructure, policies, payment terms, and more.
How To Negotiate a Long-Term Lease?
To negotiate a long-term lease, consider your needs and requirements, understand the market conditions, plan your budget, and clearly discuss your plans with your prospective landlord.
How Long Does It Take to Negotiate a Lease?
Negotiating a lease depends on the individual parties. It can take any amount of time depending on various factors such as the complexity of the lease terms, landlord and tenant requirements, and more.
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