The new year is a great time for small businesses to plan, prepare and review in order to perform even better than the year prior.
It’s obvious that inventories and marketing should get some attention, but have you considered a review of your commercial real estate lease? If not, this is the best time to do it, especially since things could have changed significantly for your company since you first saw the “Office for Rent” sign.
When reviewing that lease, there are several points to pay particular attention to, including:
- Dates and deadlines. Even if you intend to stay in your office for a while, it’s important that you check the dates and deadlines outlined in your lease. For example, you might have agreed to give six months notice before vacating or you may be close to a lease renewal.This is vital information to have handy no matter what sort of business you run. Leases that are close to expiration may be able to be rewritten with a lower fee if rents have decreased or extended at a similar rate if the rents in your area are on the upswing.
- Subleasing rights. As your company grows, you may find that you have a need for a bigger space right away. Subletting the existing space so you can move on would be a good option, but if your landlord has said you can’t or has particular stipulations, you want to be on top of that from the start.Even if you’re only interested in renting out desk space because your employees are telecommuting, you need to check those sublease clauses.
- Operating expense rent statements. Although not directly part of the lease, you should be getting an operating expense rent statement annually that explains what additional fees are being passed through to you in the form of rent increases. If you agreed to these type of fee increases, it will be outlined in the lease what expenses are allowed.Check that statement aggressively, since landlords sometimes try to include fees that weren’t included in your lease. You have the right to appeal these rent increases if there’s a discrepancy.
Your lease is as important a part of your business as all your efforts toward bringing in new customers. After all, if there’s something unexpected in the paperwork, it could cost you plenty, putting your growing company into real danger. Your Realtor can help you with any lease-related questions, don’t hesitate to call on them if you need an expert.