An agreement should always be something that benefits both side involved, yet when it comes to commercial leases, it often ends with one side feeling as though they have been burned. Oftentimes, in the haste to get a deal done, one of the two parties will capitulate on something that they feel strongly about, such as the length of the lease, and it usually comes back to haunt them at a later date. Both the tenant and the landlord want to get the best deal possible, but sometimes a little give and take can make for a perfect lease agreement that both side can happily live with.
There are a number of different things that need to be negotiated in order for things to go smoothly, but it all begins with the terms of the commercial lease. Both sides have to be willing to walk away if they cannot get this part of the lease sorted out. If the terms that both sides want are pretty far apart, there really is no reason why negotiations should continue. It is for this reason that a tenant should have a number of properties in mind when they begin negotiations with a landlord. Having all of your eggs in one basket often means taking a deal that is far from what you wanted.
One the length of the lease and rent payments are agreed to, both sides than have to start digging a little deeper to make sure all of the details are suitable to both sides. What many people forget is that there are costs accrued over and above the rent, and someone has to pay for those. Who will be responsible for utilities? Will repairs and maintenance be handled by the landlord or tenant? These are just a few of the extra expenses that can very much have an effect on the monthly budget. There is no point in negotiating a low rent payment if the costs over and above that amount blow your budget out of the water.
Another thing that both sides have to seriously consider are the clauses that will be added to the finished lease agreement. For the tenant, they may require that the landlord does not rent a space to a competitor in the same building. The tenant may also want the ability to sub-lease the property or perhaps expand at a later date. As for the landlord, he may have very specific requirements about what happens when a payment is missed or late. Some landlords will allow an extra period of time to receive payment, while other will put a padlock on the door after one day.
What we have outlined above is really just scratching the surface of what goes into a commercial lease agreement. Both sides need to be on the exact same page and be aware of how the other will react in any given situation. It is much better to take some extra time to get the agreement right than to rush into a deal that one or both ends up regretting.