Insider Tips from Retail Leasing Lawyers

Insider Tips from Retail Leasing Lawyers

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Retail leasing can be a complex and daunting process, especially for small businesses who may not have much experience negotiating leases. Many retailers underestimate the importance of seeking legal advice when it comes to leasing a retail space, but the reality is that having a knowledgeable lawyer on your side can make all the difference in securing favorable lease terms.

To gain insight into this topic, we spoke with retail leasing lawyers to get their insider tips on navigating the world of retail leases.

1. Negotiate for Favorable Terms

When it comes to retail leases, everything is negotiable. Don’t be afraid to push back and ask for better terms or concessions from the landlord. This includes rent increases, length of lease agreements, build-out allowances and more.

According to Rachel Murray-Crawford from Crawford Legal Services, “Landlords expect tenants to negotiate so don’t accept everything as is.” It’s important to remember that landlords are looking out for their own interests and may try to take advantage of inexperienced tenants.

2. Understand Your Rent Structure

Many retailers are surprised by how complicated rent structures can be in commercial leases compared to residential ones. It’s crucial to thoroughly understand how your rent will be calculated before signing anything.

– Will your rent increase over time (known as stepped or graduated rent)?

– Will you have any control over operating expenses (like taxes and maintenance fees)?

– What happens if there’s an unforeseen event like a natural disaster that affects your business?

These are just some questions you should ask regarding your potential lease agreement structure.

3. Know Your Local Laws

Every state has its own laws governing commercial leases, so make sure you familiarize yourself with them before entering into an agreement.

For instance, in some states such as California and New York City​,, tenant protections exist against certain types of unfair clauses often found within contracts , such as personal guarantees or broad default clauses which could jeopardize your business assets. It’s important to have a lawyer who is knowledgeable about these local laws and can advise you accordingly.

4. Determine Your Maintenance Responsibilities

In commercial leases, the tenant is typically responsible for maintenance and repairs of the premises. However, this can vary depending on the lease agreement and may not always be in your best interest.

Bradley Shear from The Law Office of Bradley S. Shear LLC emphasizes the importance of knowing your maintenance responsibilities by saying, “It’s critical that tenants understand what they are responsible for maintaining under their leases so they don’t incur unanticipated costs.” Be sure to carefully review your lease agreement to avoid surprises down the road.

5. Don’t Forget About Permits & Zoning Regulations

Before signing a retail lease, make sure you are aware of any permits or zoning regulations required for your business in that area. Failure to comply with these regulations could result in hefty fines or even eviction.

Attorney David Renton from David X Renton P.C advises caution by saying, “Be cautious when signing up at first; check out permits first​ because Landlords often rely on Tenants signatures before submitting permit paperwork.” Don’t rush into a lease agreement without considering all necessary permits and zoning requirements beforehand.

In conclusion, leasing a retail space requires careful consideration and knowledge of legislation governing commercial leases. Seeking guidance from experienced retail leasing lawyers can help protect tenants’ interests and ensure favorable lease terms are negotiated. Following these insider tips will lead to smoother negotiations and more successful outcomes for retailers looking to secure a retail space.

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