28 Mar Guidelines to Sign a Favorable Leasing Agreement
Signing a Lease
Whether you’re renting a place to move to a new home or you’re leasing an office to start your own business, either way, the rent is going to take a substantial amount of your income and you need to take this matter seriously. While you should look for as many options for the place as you can, there is a lot you need to take care of even after finding the right place. The leasing agreement that you sign with your landlord needs to be taken seriously. It is highly advisable that you seek a commercial leasing lawyer who would be expert in forming the agreement that doesn’t put you in any disadvantage. A professional lawyer expert in leasing agreements will be able to pay attention to the details that are usually overlook when forming an agreement. However, in this present era, it wouldn’t be wise to keep yourself totally unaware of anything that is taking up chunk of you investment. So, this article will be guiding you through the common tips and guidelines that you need to keep in mind when renting a place for your office or home.
Know Your Needs
This is the first and foremost step that you need to take. Before even looking for a place, be certain about your needs for space, environment and other needs. You need to have a clear idea about the space needs of your office and what locality suits you. You also need to some long-term needs of your business. This will help you devise the leasing agreement according to needs of your business. You also need to be aware of the budget constraints of your business and what price you are willing to pay upcoming years. In short, before forming the leasing agreement, you should be completely aware of your needs and requirements in present, as well as in near future.
Know the Leasing Types
Before you go and sign on just any document your landlord hands you, it would be wise for you to get to know about the leasing agreement types.
Gross Rent Lease
This leasing agreement will be the most heavy on your pocket, but on the bright side, you will be free of renting payment worries once for all. In gross rent lease, you pay a single amount to the owner of the building. This single amount covers your rent, as well as other charges like property tax, maintenance charges, janitorial service charges etc. If you’re signing this leasing agreement, make sure all services are named in the agreement instead of the vague term usually used; ‘Service Charges’.
The net lease reduces the rent you have to pay. This is because, you pay for most of the services directly. In the rent, you only pay for the rent and one of the following: property tax, insurance or utilities. In this way, your rent reduces considerably while you pay for the services on your own.
Double Net Lease
This is a modification of Net Lease where you pay the base rent in addition to 2 other things, usually property tax and insurance.
Triple Net Lease
This is further a modification of Net Lease where you and your landlord agree to the payment of base rent and 3 other elements.
Percentage Rent Lease
If you’re going for a commercial leasing agreement, this is probably what you’re going to use. In a Percentage Rent Lease, you pay the base rent and a percentage of your gross sales for a defined period of time. This category of leasing agreement is generally used for commercial buildings.
Hire a Lawyer
As mentioned before, it would be good for you to know about the leasing types and things you should be careful about, but still, a commercial leasing lawyer is expert in paying attention to the details. It is highly recommended that you hire a lawyer that has an experience in negotiating leasing agreements. Despite vast experience, people end up making a lot of mistakes in leasing negotiations and these mistakes can’t be undone for years. This binds them under years of unfavourable contract. So, hiring an experienced lawyer who has experience in commercial leasing agreements, can save you from a lot of financial stress.