Tips for Negotiating a Commercial Lease Agreement for Your Business

Looking at the details

A written lease agreement promotes the stability and longevity of your business.  New businesses are often too fragile to survive moving locations.  A valid written lease agreement can help prevent that from happening to you.

A commercial lease is a written contract that is meant to be a binding agreement for the rental of specific property or space for a specific time.  Signing the agreement means you agree to be bound by its terms even if your business doesn’t make a profit.  This is the most compelling reason to negotiate a lease with terms you can live with in a worst-case scenario.

Following is a list of factors you should consider before you sign a lease agreement:

  • Know the market.  Conduct research to determine the market rate of rent in the area you plan to operate.  Find out how many similar businesses operate in the area, and how many more the market can sustain.
  • Know your needs.  Make lists of “must-haves” and don’t waste your time looking at properties that won’t work.
  • Know your costs.  Find out who will be responsible for paying property taxes, repairs, and fines for non-compliance with local ordinances over which you have no control.  (Such as graffiti laws.)
  • Know the zones.  Verify zoning restrictions for each property that makes the short list.
  • Know the terms.  Conduct research to understand the pros and cons of common commercial lease terms.

As you begin shopping for rental property, two terms will likely stand out among many prospective commercial leases: gross leases and net leases.  In a gross lease, the tenant is responsible for a specific rent.  The landlord generally pays other expenses such as property tax and maintenance costs.  In a net lease, the tenant pays rent and is also responsible for additional expenses related to the property.  Some net leases are “double net” or “triple net” leases.  Those terms mean the tenant will pay a monthly rental amount, plus additional expenses of the property annually, up to double or triple the annual rent.

Your particular business and circumstances will determine which lease terms are best for you.  The best course of action is to consult with an experienced business law attorney to review the lease with you before you sign.

The attorneys at the Scolieri Law Group, P.C. can review your situation and help you compare options.  Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can take care of the details for you every step of the way.  Contact us today at (412) 765-0546 or via email at