Tips for negotiating a better lease agreement
Tips for negotiating a better lease agreement
?Did you know that the terms of your lease agreement could significantly impact your financial position? Even though signing a lease may seem like just another standard business document, it's a significant and legally binding contract. Negotiating the terms of your lease early on can save you from potential problems down the road. If you're leasing property for your business, here are some tips for negotiating a better lease agreement:
Have a detailed game plan before you negotiate
Before you even set foot in a leasing office, you should have a detailed game plan in place. For example, you'll want to know what you'd like to lease, the cost, and how long you're willing to sign the lease. These will not only help you prepare for the negotiation process, but it will create a strong foundation for your lease agreement. Additionally, be sure to have a detailed financial plan set aside before entering into a lease agreement. It will help you determine whether leasing is an excellent financial decision for your business.
?Carefully review the lease before signing.
Although this may seem like an obvious suggestion, you'd be surprised how many people don't take the time to read their lease agreement in full. Remember, the lease is the binding contract that sets out the terms and conditions of your lease, including the financial obligations and timelines, so it's imperative to read it in full. Make sure you understand the lease agreement in its entirety before signing it. Having your lease agreement reviewed by a third party is also a good idea. Because lease agreements vary by type and the state in which you're leasing, it's crucial to have a lease agreement that is not only correct but tailored to your specific business needs. For example, if you plan to sublease the property, you'll need to include that in the lease agreement.
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Check for hidden fees and penalties.
A lease is a binding contract, so there can be hidden fees, penalties, or other unexpected stipulations within the document. For example, many lease agreements require you to pay a security deposit upfront. While a security deposit is not an unexpected cost, it's important to know the amount you'll be required to pay upfront so you can budget accordingly. You should also be on the lookout for any language that requires you to pay for repairs, renovations, or other unexpected costs. This is why it's essential to read the lease agreement in full — to spot and avoid any potential problems or issues that may arise.
?Negotiate your initial lease terms and conditions
When you first sit down to negotiate your lease agreement, start by looking at the length of the lease. This is your lease term and will determine the total time you'll be leasing the property. Depending on your needs, you may want to sign a one-year lease, a two-year lease, or even a five-year lease. Depending on what you're leasing, you may also be able to negotiate the monthly amount. In most cases, the monthly amount is a set amount based on the lease agreement, and you could save significant money if you can negotiate a lower monthly amount.
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Don't be afraid to ask for repairs or modifications.
Depending on the age and condition of the property you're leasing, it may require repairs or renovations. It is not uncommon, but it's important to know what is expected of you regarding repairs. For example, if you're leasing a commercial property, the roof will likely need repairs. In this case, you may pay for the repairs out of your own pocket. If leasing an apartment or office building, the building may require renovations. Again, reviewing the lease agreement and understanding what expenses you'll be responsible for is essential.
?Be aware of the different types of leases.
There are several different types of leases. While the terms and conditions of each lease will vary, below are some of the most common types of leases:
??- Standard Lease - A standard lease is a lease that is not based on a percentage of the estimated gross sales of the business. Instead, it usually consists of a set amount of money paid each month, along with other lease terms and conditions.?
?- Percentage Lease - A percentage lease is based on a set percentage of the estimated gross sales of the business. This means that the lessor will receive a certain percentage of your profits.
?Summing up
Leasing property for your business can be a great way to expand your operations. However, it's crucial to understand the terms and conditions of your lease agreement before signing it. Having a detailed game plan, thoroughly reviewing the lease agreement, and negotiating your initial lease terms and conditions can help you get a better deal on the lease. Remember, the terms and conditions of your lease could have a significant impact on your financial position. So, it's essential to do your research and negotiate for the best deal possible.
Are you considering a lease? Speak to a Creditville lease specialist, call 07000330330 or send us a WhatsApp message at 07055554900.