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What Can I Negotiate In A Commercial Lease Agreement?

commercial medical lease propertyBy: Chase Howard

Commercial leases are arguably the most one-sided contracts you could enter into while doing business. Most, if not all, commercial property owners and landlords will shift all of the liability of the premises onto the tenant. This includes maintenance, repair and replacement of structural components, roofs, wiring, plumbing, and even store fronts and sidewalks.

While a majority of the terms in a lease are “non-negotiable” there are a number that landlords can reasonably agree to change.

  1. Permitted/Exclusive Use: If you’re operating a specialized business, you want to ensure that you’re the only tenant offering certain services. Many landlords will allow provisions that establish an exclusive right for the tenant to be the only tenant in the space to provide those certain services.
  2. Time Frames: Expanding time frames to cure alleged defaults or to pay the difference in proposed and actual operating expenses might seem small, but an additional number of days could make the difference between complying and defaulting.
  3. Replacement of HVAC – If the HVAC in the premises is potentially older, many landlords will agree to provide a new HVAC prior to opening business. The tenant, however, will typically pay for maintenance and repair after that.
  4. Creative Options for Rent Commencement – Most leases will provide that rent payments will commence either a number of days after signing or on the first day the business is operating to the public. In many cases, landlords have agreed to a reduced base rent for a number of months to start, following by increased rent payments on the back end of the lease.