Small Business Owners Need Advocates for Commercial Lease Negotiations
.
3. What is the base year for pass thru of operating expenses (CAM)?
Is it based on full occupancy or partial occupancy?
4. What building services are provided by subsidiaries of landlord?
5. What is the base year for pass thru of real estate taxes – Has the building been reassessed following improvements?
Any increases in taxes should be applied to a full, recent assessed value.
6. Who pays for structural repairs to the building?
Who is responsible for replacement of A/C units and plate glass?
7. Who insures the structure of the building against storm damage?
What happens to the tenant lease if there is storm damage?
8. In case of dispute, who pays the legal expenses?
9. Are there any additional charges for use of the premises in the evening or on weekends?
10. Is the parking provided to the tenants owned or is it leased?
If the parking is on leased property, what is the term of the lease? Is it for the full term of the tenant’s lease?
11. Does the lease have a clause allowing the landlord to cancel the lease with proper notice?
(This is something new in leases and makes it difficult for an owner who is seeking financing to assist in a relocation of his business.)
12. If major tenant improvements are required the landlord should make the improvements and be responsible for getting the certificate of occupancy.
The tenant rent payments should not commence until there is a C of O.
The small business owner should seek the advice of one or more professional: a commercial real estate professional. a real estate attorney, and an accountant who can evaluate the current and future costs that may be incurred because of terms and conditions in a lease.
Related articles:
