Maybe you are moving your business out of your home office. Maybe the office space you have been using for years no longer meets the needs of your company. When you’re considering leasing a commercial property for your Jackson business, it is important that you know what questions to ask a real estate agency or landlord so that you can make an informed decision. If you don’t ask the right questions, you may find yourself in an arrangement that is not right for your company.
Preparation for Leasing a Commercial Property
The search for a new commercial space is an overwhelming prospect. Fortunately, taking the right precautions ensures that you find a facility that meets the needs of your business. However, if you are new to leasing a commercial property, or you have not done so in a very long time, you may not be sure what questions you should be asking. We put together a quick look at the most important questions that you should ask before leasing a commercial property in Jackson, Mississippi.
Under What Circumstances Can the Lease Be Terminated?
One of the most important leasing questions is what the exact terms of the lease are. While most commercial leases are for one year, an inital two- or three-year lease is not uncommon. It is important that you not only find out how long the lease is for, but that you also ask under what circumstances the lease is terminated. For instance, if your business’s circumstances change, or another major tenant in the building leaves and causes your business to drop, is there a way for you to exit your lease early? Try to negotiate a break clause into your lease that allows termination of your lease early. This protects you against the unexpected. Watch out for a landlord who is unwilling to negotiate the terms of the lease with you. Sometimes, this is a sign of an unfavorable landlord who will be difficult to work with when things go wrong.
Is There a Possibility to Expand?
When you initially move your business into a commercial facility, it’s tricky to gauge how much space you actually need. This can cause a variety of problems. Say you choose too small of a space; you have no room for growth. But, say you rent too large of a space; you’re left with rent payments you struggle to afford. It’s important that you ask potential landlords about possibly expanding your business in the future if necessary. For instance, is there a neighboring space that you could expand into? Is it easy to move into a larger space, should one open up? Having the possibility to expand would allow you to lease a conservative space now while your business continues to grow.
Who is Responsible for the Commercial Property’s Insurance?
In the rush and excitement to secure a space for your business, don’t forget to talk about insurance. It is important that you discuss insurance coverage and requirements. This ensures that your business is covered in the event of an emergency. Generally, landlords carry a comprehensive policy that covers liability for common areas such as lobbies, stairways, and elevators, and that provides casualty protection for the building itself. It is important that you find out from a potential landlord what areas of the building you are responsible for. At the very least, you likely must carry liability coverage that protects the landlord against any claims that arise from your business’s operations. For example, if a customer gets injured in your office. Make sure that you read through the landlord’s policy in full. Consult an insurance specialist and find out what additional policies they recommend you carry for your business.
Who Else Can Lease this Property?
Of course, another piece of important information when leasing a commercial property is who the other tenants are in the building. Knowing who your neighbors are is critical. You may not want to move into a building if there is a competing business, or if a neighboring business attracts an unsavory crowd that could deter customers. It is then important that you also ask what future businesses are allowed to move in. Additionally, you should ask to negotiate limits on what type of companies move in next to you in the future. You may even be able to secure a non-compete clause as part of your lease that would ensure that no similar business can open in the business or center.
Is the Space Modifiable?
It is also important that you ask if the space is modifiable, and if so, to what extent. The fact is that it is not usually possible to find a commercial facility that meets the exact needs of your business. You may need to do some renovations to make the space work. It is important that you ask the landlord about acceptable modifications. If no, or only minor, modifications are acceptable, then the space may not work for your company. Therefore, it is important that you find out what the rules are before you sign the lease.
Can I Sublease if Necessary?
Before signing a long-term lease for a commercial facility, it is also important that you find out what restrictions surround subleasing. The reality is that you may sign a 5-year lease only to discover that the space you rented is too large or too small for your business’s changing needs. If you cannot get out of your lease right away, your only option may be to sublet to another business. Before signing your lease, however, find out if subleasing is allowed. Furthermore, ask about restrictions on what kinds of businesses you can sublet to.
Knowing what to ask a real estate agent or landlord before you begin looking at rental properties for your business can help you to make the right decision that will fit the needs of your company. Contact us to learn more about what you should ask before signing the lease on a commercial property.