Signing a new office rental agreement can be as exciting as it is stressful. However, making the right choice about your rental agreement can take a little stress out of your day as well. Remember these seven things before you sign a rental agreement that could be detrimental to your business plan.
1) Parking – A surprising number people fail to take this important detail into consideration when renting office space. Not only do employees need to have easy and affordable access to parking, but also your customers. Where will they park? Is it in a well-lit area that will deter crime? More importantly, how convenient is the parking available to your office space?
2) Terms – When is rent due? How much is rent? What does the rent cover? What are the penalties for late payment? What are the terms for rental rate increases? Are you responsible for your share of property taxes or is it split equally or ratably among other commercial tenants? These are all important questions you need to understand about the terms of your rental agreement.
3) Growth Potential – Is there room to expand if you find your business is suddenly booming and you need additional office space? How accessible is that growth area compared to where you are now? Will the available parking accommodate new growth? Will you be able to modify your current rental agreement to include the additional space if necessary? Again, these are all important queries you need to know answers to.
4) Utilities - What utilities are included as part of the rent you pay? What utilities are your responsibilities to cover – above and beyond the rent? Is there any room to negotiate tying utilities into the rental agreement? It’s much easier for many businesses to budget for set expenses rather than dealing with expenses that fluctuate from month to month. You need to consider what will work best for the way you do business when considering rental agreements.
5) Duration – How long does the rental agreement last? What happens once the rental agreement expires? Will you be required to commit to another long-term rental agreement or will there be room to negotiate terms before signing another lease? Remember, however, that this could be a negative for you as prices could increase at every new lease signing as well.
6) Maintenance – Who is responsible for maintenance inside and outside the building? Things like common areas inside a larger office space is always a concern. However, taking care of the outside is a concern as well. Who is responsible for lawn care, landscaping, snow removal, etc.? Repairs needed to sidewalks and parking lots are also an area of maintenance. These are all things you need to know before you sign.
7) Flexibility – How accommodating is the rental agreement for the ever-changing needs of businesses today? Can you use your own branding and logos on the exterior of the building and/or your office? Can you add signs near the exterior of the parking lot or are there signage restrictions? How visible can you make these things? Is there a transfer clause that enables you to transfer the lease or even sublet, should the need arise?
With all these things to consider, it might be a little too easy to forget other important issues such as business property insurance. You should never rely on the building owner to protect your business property.