The term “signing your life away” holds a lot of truth, especially in terms of signing a rental agreement. Whether you’re signing a residential or commercial lease, it’s important to keep in mind that leases are binding legal agreements that have severe legal consequences if they are not upheld.
With the rise of small businesses and solo and entrepreneurs comes an increase in leasing office space. By leasing retail spaces, small businesses and entrepreneurs are able to establish a brick-and-mortar space while maintaining a strong online presence. This allows them to expand their reach and better meet the needs of their customers. Similarly, renting a warehouse space for storage is also common.
However, entering into an office lease agreement is serious business. It’s easy to get caught up in the excitement of office hunting and finding the office space of your dreams, however, commercial leases — as with residential leases — are not to be taken lightly.
Before entering into an office lease agreement, it’s important to create a business spending plan or budget. Your business’s accountant or financial adviser may be able to help with. In the event you do not have one, using software may also be helpful. Either way, it’s important to weigh your expenses, revenue, and profit in order to determine what you can realistically — and comfortable — afford to pay for rent. It’s important to consider worst-case-scenarios, such as a drop in business during slow periods.
Also, when entering into an office lease agreement, it’s imperative that you thoroughly understand the lease’s terms of agreement as well as the potential consequences will be if the lease is broken. Typically if a lease is broken the tenant is required to pay the remaining balance in full and sacrifice receiving their security deposit.
If you’re unsure in regards to the lease’s terms of agreement, ask the landlord to explain them to you in detail or take the lease to an attorney for clarification. While this may seem like an unnecessary expense, it can save you thousands in the long run. Read more.