So it goes without saying, read over your lease in detail and hire an attorney who specializes in commercial real estate to go through the clauses and fine print.
Consider Building in Clauses to Protect your Business
To protect your investment and long term business interests, it’s worth investigating and negotiating some potential add-on clauses to your lease. These might include:
- Sublease – This builds in some flexibility so that should your business plans change you can sublet your space to another business.
- Exclusivity clause – Prevents the landlord from leasing any other premises on the development to a direct competitor of yours.
- Co-tenancy – If the development has an anchor tenant such as a known retail brand and that tenant closes, a co-tenancy agreement can protect you from a potential loss of custom by allowing you to break the lease if the landlord doesn’t replace the anchor tenant in a specified time period.
Businesses get closed down without prior notice all the time because they defaulted on their lease. Protect your interests and your customers by knowing what you are agreeing to upfront. Will you be locked out immediately? Will the landlord initiate eviction proceedings? Can you negotiate more time for yourself should you default? If you default could you pay only the month’s rent owed as opposed to the remaining money owed on the lease? It’s worth investigating.
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