By David Baron
Commercial leases and residential leases are very different animals. First of all, a commercial lease is simply a contract between a business and a landlord for the ability to rent a building. The lease can be for a short time period (as low as even just a month) or long term (sometimes as long as fifteen years). The lease can be a written document or it can also be oral. Usually oral leases are difficult for judges to enforce after a year has gone by.
Negotiation with Landlords on Terms
It’s important to note that much like your business is out to make money so is your potential landlord as well. Thus, many landlords will begin a negotiation with your business by asking for terms that may not necessarily be in your best interest. They are often willing to make concessions, especially if they desire to rent out the property. However, your ability to bargain has a lot to do with the strength of your local market. One of the facts of life is that if the market is tight, the landlord will have much more leverage than you will.
Is the rent not negotiable? Don’t fret. Often your landlord will make other concessions, such as an agreement to limit rent increases and keep them to a minimum and to consider paying for utilities, taxes, repairs, upkeep, and insurance. You could also negotiate other lease terms, including the ability to sublease if you desire. Landlords, especially if they desire your business, often will pay for improvements to the building if you agree to a longer term on your lease.
Is the Location Properly Zoned for Your Business?
Of course, one of the major questions that you might have would be to make sure that the location you are considering renting is properly zoned for your business. In order to make sure, there are several steps you should take. First of all, check your local zoning laws. These laws allow certain types of businesses within certain areas of a city. Check to see if your area is in a residential, industrial, commercial, or a mixed-use neighborhood.
Address Any Other Legal Obstacles
The next step will be to determine what other legal obstacles you might come across. Some cities may limit the number of certain businesses. For examples, some cities will put a cap on the number of fast food restaurants and coffee shops they have within city limits. Some cities have regulations regarding parking, hours of operation and other requirements as well. Many cities have business development offices that will help the potential business owner understand and cope with these requirements. If you live in the area, then our Coachella Valley real estate attorneys can also help you understand many of the requirements as well.