Before signing a commercial real estate lease gas knife lamb

Other things you may want to strike are any administration fees of more than 3%, paying for benefits for the landlord’s employees, build-out costs for other lease units. Read more about negotiating CAM terms. 5. Have I considered asking for a CAM Stop lease?

While the landlord may increase your base rental rate, it takes a lot of the "mystery fee" out of the rent. Alternatively, ask for a cap on the CAM so it cannot increase by more than a certain negotiated percent. Pay attention to how and when the CAM fees increase during the term of your lease?

What is "standard" is different from town to town and property to property, but try to avoid signing any lease that shifts the burden of these repair or replacement costs to the tenant. If your landlord is requiring you pay for these costs, there are compromises.

For example, if the lease says you are responsible for HVAC repair and replacement, suggest to the landlord that he strike "replacement" and that your repair obligation is limited to a maintenance contract, maybe two times per year, and that you be responsible for all general repairs up to a certain annual maximum amount. 7. Is the lease assignable? Can I have a sublessee?

Check to see if the landlord has the right to terminate the lease in the event you ask for an assignment; that is, for someone else to take on the lease if you sell the business. For many businesses, your location is a big piece of its value. Some businesses try to assign a lease in order to get out of it, but a landlord will want to re-negotiate the terms with the assignee.

If the landlord has the right to terminate the lease once you ask for an assignment, that could kill your sale. Ask the landlord to remove this provision or allow it be modified so it does not apply in the event of a sale of your business. Understand that the landlord will still want the right to reject the assignment if the new tenant is not financially acceptable.

Similar to the assignment of a lease is the common practice of taking on a sublessee. As it sounds, a sublessee is another business that works in your lease space under your lease terms. You pay the lease and the other party pays you a portion of the cost. Many landlords don’t allow a sublessee, but you may want to share costs with someone. If you think you might want to take on a sublessee, you’ll need to negotiate with the landlord before you enter into the lease. 8. Does the lease have an arbitration clause?

Many contracts these days have an arbitration clause. These clauses state that both parties agree to settle any disputes with arbitration instead of litigation (going to court). Read the lease contract to see if the arbitration clause is mandatory. Make sure you have a right to participate in selecting the arbitrator and other decisions for arbitration. 9. Will I need a personal guarantee?

If your lease constitutes 3 percent of a larger property, the landlord will be much more unlikely to negotiate with you than if your space is 25 percent or more. To truly understand what items are important to negotiate, consider hiring a lawyer to review the document and help you with the negotiations.