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Save Your Money: Know the Common Provisions in Office Leases

Melanie James — Mon, 07 Dec 2009 03:46:00 +0000

Getting an office space lease can be a complicated process especially if you do not check the provisions in your contract. Remember, knowing the Terms and Conditions can save you from trouble and unnecessary costs in the long run.

Below are unfair provisions that you should watch out for when studying your office lease agreement:

Charges for building repairs costs, insurance premium, property taxes, and other building expenses can increase during your lease term.

Your landlord can terminate your lease contract without a valid reason.

There are disclaimers stating that building repairs are being rendered to the tenants.

There are lots of restrictions in using your office space.

Your Office Space Lease – A Binding Contract

A signed lease is a non-cancelable agreement so be sure that you have reviewed all your lessor’s Terms and Conditions before placing your signature. You need to check out if your lessor has provisions in case unexpected incidents happen.

For instance, what happens if you may be forced to give up the lease because of financial reasons? Would you be able to sublease the space to avoid defaulting on your lease?

Subleasing the office space you previously rent can save you from repayment obligations in case you decide to shut down the business. However, if the subtenant fails to keep up with the lease, you will still be responsible for the payment.

Breaking Your Office Space Lease Agreement

Do you think your landlord fails to meet the services and terms stated in your lease contract? If yes, then you have the right to terminate the lease on grounds of contract violation.

If these violations include terms and conditions that affect the operations of your business, then you have every right to question your lessor. Speak with your lessor and point out the stipulations in the contract that were clearly violated.

Your lessor can take action to straighten out the situation or change the lease terms according to your wishes. If you have reached an agreement, you can save yourself the hassle of having to pursue legal action. To make sure that your rights as a tenant are protected, consult a business attorney.

Nevertheless, disputes can be avoided by examining the terms of your lease contract right from the start. Consult a business attorney to make sure that the stipulations are legal and fair. If you have signed up a contract that contains unreasonable provisions, you may find it very difficult to complain and demand changes.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

How To Break Office Lease Without Being Penalized?

Melanie James — Wed, 23 Sep 2009 23:57:41 +0000

In some instances, a business owner must make the decision to give up its current lease location. Perhaps the business isn’t going as expected and moving to a different location is a better choice. This article discusses possible options for small business owners who want to discontinue their current office space lease contracts.

Speak with your landlord. This is a very important step for anyone who plans to break an office lease contract.

Discussing your concerns with your lessor will help you to decide your next action.

What is the reason why you plan to terminate the contract? Is it because your business isn’t going as expected and you can’t keep up with your monthly payments?

If the problem is with regards to your lease payments, the best thing to do is negotiate with your lessor. However, if you really think that leaving the space is the best solution, politely request your lessor if it’s possible for you to find a new tenant as replacement.

If your landlord consents to let you go as soon as a new tenant has been found, see to it that all the details about this agreement is put into writing.

Without a written agreement, your landlord may insist that you take on the payment obligations, should the new tenant defaults from the lease. This is why a formal turn-over is absolutely necessary and everything should be clearly stipulated in a new contract.

Sublease the place. What if you landlord refuses to release you from your obligations? In this case, you may request to sub-lease the place instead. Sub-leasing means you will be finding a new tenant to replace you so that monthly payments will be submitted continuously.

Nevertheless, should the sublessee defaults from the lease, you- the first lessee will take charge of the debts. When looking for a sublessee, one of the most important criteria you should look for is credit-worthiness.

Be Prepared to Pay Lease Penalty. Regardless of how your negotiation with your lessor turns out, you should be prepared to pay penalty charges. Your lender may choose to keep the security deposit you submitted at the beginning of your lease term.

The penalty charges that your lender can impose upon you must be stipulated early on when you first signed your lease contract. Make sure that you carefully review your contract with your business attorney to avoid being taken advantage of.

On the hand, whatever penalty is stated in your agreement, you should be ready to accept the consequences for breaking lease before the completion of your lease term.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.

Common Operating Costs Of Office Space Leases

Melanie James — Thu, 17 Sep 2009 08:43:12 +0000

To determine the operating costs involved in a commercial real estate lease, it’s important to know exactly what services would be provided by your landlord. Generally, services that are provided for a leased office space are electricity, cleaning services, security, air conditioning, heating, maintenance and repairs.

Whether or not you would be paying for these operating costs separately from your monthly rental depends on the agreement between you and your landlord.

It is very important to understand exactly the terms of payment associated with your lease right before signing any contract.

How To Break Office Lease Without Being Penalized?

Your landlord can either charge you separately for the operating costs or include operating costs in your monthly lease payment.

In some cases, your landlord can ask for an increase in your rental when operating costs increase. This is called a net lease where the landlord bases the increase in rent on actual expenses incurred. In other cases, the landlord may choose to increase your rent on an annual basis. This is done for Gross Leases and Step Leases.

Landlords can also unexpectedly charge you additional payments for services that are provided during holidays or weekend or after business hours. If you do agree with this arrangement, it is important that you are clear about what the exact conditions of payment will be. Nevertheless, you should be aware of this condition right from the day you sign your lease contract.

Aside from operating costs, a landlord may also require a tenant to pay for property taxes. If this is the case, you have to be very clear with your landlord exactly how much of the property taxes you would be paying.

If the property has been on hold for a long time, you can be stuck with an unreasonably high property tax in your bill. See to it that your landlord knows that you are aware of your rights as a tenant especially with regards to Paying Business Property Taxes.

Capital Improvement Costs

Another important factor to consider with regards to operating costs is paying for capital improvements of the office space. Landlord should not impose such major charges to their tenants so make sure that any major expense is not included as one of your operating cost charges.

Remember, not being clear about the operating costs and other charges involved in your office space lease can spell out problems in the future. It can be a major hindrance to your business’s cash flow if you’re stuck with costs that you were not aware of when you signed your lease. Such charges may be included vaguely within your lease contract but you might have failed to notice during the signing.

Once you’ve signed however, you are bound by terms and conditions of the contract and there’s no way to get out unless your landlord releases you. With this in mind, see to it that all terms of payment are clearly stipulated in your leasing contract or have an attorney review the lease contract before putting in your signature on the lease agreement.

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About the Author:

Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.