{"id":5113,"date":"2021-10-20T05:41:13","date_gmt":"2021-10-20T12:41:13","guid":{"rendered":"https:\/\/www.officefinder.com\/officeblog\/?p=5113"},"modified":"2022-03-09T11:05:40","modified_gmt":"2022-03-09T19:05:40","slug":"4-questions-ask-before-signing-office-space-lease","status":"publish","type":"post","link":"https:\/\/www.officefinder.com\/officeblog\/4-questions-ask-before-signing-office-space-lease\/","title":{"rendered":"4 Questions To Ask Before Signing An Office Space Lease"},"content":{"rendered":"

If you\u2019re operating a business and planning to have a physical location, an office space lease will be one of the things that will put a dent in your overall budget. In fact, committing to any office space for your business presents more complexities than simply renting a house. For one, most leases will oblige you to rent the space for three to five years, which can be intimidating. It is always best to take advantage of the services of a qualified tenant representative<\/a>, like the ones we have at OfficeFinder.
\n<\/span><\/p>\n

There are a number of important factors to consider before signing an office space lease, including not only the location but also having an understanding the intricacies of the contract. It would also be best if you\u2019re equipped with the right questions before signing a deal with the landlord. Once again, here is where the services of a good tenant rep will be beneficial.
\n<\/span><\/p>\n

To help you out, here are 4 questions you need to ask a potential landlord before signing a <\/span>commercial lease agreement<\/span><\/a>:\u00a0<\/span><\/p>\n

1. Is the lease assignable?<\/h3>\n

If you\u2019re not sure if your business can still operate within the years stipulated in the lease agreement, it\u2019s essential to ask your potential landlord if they have the right to terminate your lease in case of an assignment. A lease assignment is when you have someone take over the office space in the case that you want to sell your business.\u00a0<\/span><\/p>\n

Assigning a lease is important for the tenant since it\u2019s a way for them to get out of the lease agreement. Hence, a tenant won\u2019t technically violate the lease agreement. Keep in mind that a landlord also has the right to approve and renegotiate new terms with the assignee. The landlord may also decline any assignee if they find them financially incapable. A key clause to include in the lease is that the Landlord will not unreasonably grant approval.
\n<\/span><\/p>\n

By knowing if the lease is assignable, you\u2019ll rest assured that there\u2019s a way to get out of the lease agreement if ever your business fails to grow without burning a hole in your pocket.\u00a0<\/span><\/p>\n

\u00a02. Do you have any policies for moving in or out?<\/h3>\n

Inversely, if your analytics are showing promise for your business for years to come, then time is of the essence\u2013\u2013you want to establish a physical location immediately. In this case, ask the landlord about the policies for moving in. How soon can you move in? Is there any free rent available? What are the payment options?\u00a0<\/span><\/p>\n

Additionally, you may also want to know the moving-out process. For one, you don\u2019t want to break the agreements contained in a lease agreement as it comes with grave consequences. To paint a picture, here are some common penalties you may face if you break a lease agreement:\u00a0<\/span><\/p>\n

Pay large fees:<\/b> Technically, landlords are running a business. As with every business owner, they don\u2019t want to give up any financial opportunity. By breaking a lease, you may ruin the landlord\u2019s flow of income, which is why breaking a lease comes with a fine. Sometimes, the fine may be around one or two months\u2019 worth of rent.<\/span><\/span><\/p>\n

Face legal consequences:<\/b> If your landlord is litigious and you want to break the lease agreement, then there\u2019s a huge chance that you may end up with a lawsuit. However, a lease termination has a rare chance of going into court, as it can be quickly settled by paying a fee, but it\u2019s still a possibility.<\/span><\/span><\/p>\n

Hurt your credit score:<\/b> Credit scores are the ones that\u2019ll determine your creditworthiness, which means that lenders will use this score to gauge if you\u2019re financially capable of paying any debts. If you terminate a lease before the contract, then your landlord may send your debt to a collection agency, ruining your creditworthiness.
\n<\/span><\/p>\n

\u00a0<\/span>3. Can alterations be made?<\/b>\u00a0<\/span><\/h3>\n

Since businesses operate differently, you may want to make a few changes to the space so you can make the <\/span>perfect working environment<\/span><\/a> for your workers. But since you\u2019re leasing the space, you\u2019ll need permission to change something, even the carpet and paint color, which is especially true for a shorter-term lease. Hence, ask your landlord if they\u2019ll accept any alteration to the office space.
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\u00a0<\/span>4. What\u2019s included in the rate?<\/b>\u00a0<\/span><\/h3>\n

The rental rate may not just be the payment of the space. In fact, some building owners may have some inclusions in the rental rate like taxes, insurance, utility and cleaning costs, know as a\u00a0 fully service lease. Still, some landlords may require you to pay for those services yourself, know a a NNN lease<\/a>. And others a combination of the two.
\n<\/span><\/p>\n

Moreover, if the space comes with an HVAC, ask whether the rate already includes any possible repairs and replacement, or will you be the one covering the cost for those. Knowing what\u2019s included in the rental rate will allow you to set aside some money for any possible repairs. Additionally, you\u2019ll be able to set aside a monthly budget for any recurring fees, like electricity and water.\u00a0<\/span><\/p>\n

Also, find out if there are annual cost pass-throughs of amounts over a base year. These are usually in fully serviced leases where the Landlord pays the base year expenses of the leased office space and tenantss pay a pro-rata share of increases over the base year.<\/p>\n

Final words<\/b><\/p>\n

Before committing to any office space, you must ask the questions above and learn some <\/span>tips and tricks to negotiating<\/span><\/a> as any mistakes may end up costing you. For instance, if you expect that you can simply change the space but the owner didn\u2019t agree to this, you may end up returning the office space to its original condition, which is surely an expensive endeavor on your part.\u00a0<\/span><\/p>\n

So make sure that you\u2019ve meticulously understood the agreement as well as any upfront costs before signing a commercial lease agreement.<\/span><\/p>\n

And, if you’d like some free assistance, make sure and take advantage of the services of a good tenant representative. We can help with that. Contact us today<\/a> for a no-obligation discussion on how we can help.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re operating a business and planning to have a physical location, an office space lease will be one of the things that will put a dent in your overall budget. In fact, committing to any office space for your business presents more complexities than simply renting a house. 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