Six Questions to Ask Before Signing a Lease
by Mike Brassil

One of the most important steps an entrepreneur takes when expanding a business is leasing office or retail space. For many, that first lease is a new experience. This article contains some questions a new entrepreneur should ask potential landlords.

As a rule, leases are contracts written by attorneys to the advantage of property owners. When you sign a lease, you are obligating yourself to pay for that space regardless of the success of your business. If the venture is unproven, it would be prudent to: ask for the shortest term possible; ask for a month to month rental agreement; or arrange to rent with an option to lease at a later date. In the event

your venture is unsuccessful, you will not be stuck with a huge obligation, as you would be if you signed a long-term lease.

1. Is it a ‘Triple Net’ lease? In addition to all the usual store expenses, does the lease require you to pay for: utilities; signs; lighting; taxes; insurance; trash; maintenance; etc.,

2. If building use is interrupted, does the lease define the remedies available to you, such as: rent abatement or lease cancellation?

3. If the landlord does not meet repair responsibilities, after giving notice, can you make the necessary repairs, and deduct the cost from the rent?

4. Does the lease specifically state the square footage of the premises? The total rentable square footage of the building?

5. Is the landlord obligated to provide a detailed list of expenses to support rent increases?

6. Does the lease clearly define how disputes will be decided?

Having these questions answered to your satisfaction is the first step to a healthy relationship with a new landlord.

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