{"id":9026,"date":"2017-01-15T18:00:47","date_gmt":"2017-01-16T01:00:47","guid":{"rendered":"http:\/\/financenewmexico.org\/?p=9026"},"modified":"2017-05-01T10:42:52","modified_gmt":"2017-05-01T16:42:52","slug":"details-can-be-weighty-when-renting-commercial-space","status":"publish","type":"post","link":"https:\/\/financenewmexico.org\/sandbox\/articles\/general-business-advice\/details-can-be-weighty-when-renting-commercial-space\/","title":{"rendered":"Details Can Be Weighty When Renting Commercial Space"},"content":{"rendered":"
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By Finance New Mexico<\/p><\/div>\n

Renting a commercial space is a move many entrepreneurs postpone as long as they can, because it\u2019s one of the biggest expenses and most consequential commitments a startup or young company faces.<\/p>\n

A commercial lease binds landlord and tenant to a variety of promises. A well-executed lease can benefit both parties, but a hasty, vague arrangement can break an embryonic enterprise.<\/p>\n

Commercial Leases v. Residential Leases<\/strong><\/p>\n

When someone rents an apartment or home, consumer protection laws dictate many terms of the landlord-tenant contract. Not so with commercial leases, which have few of the privacy protections and other regulations afforded residential rentals.<\/p>\n

A renter rarely performs a radical makeover on a new home, but commercial renters often need to customize a space to accommodate offices, retail operations or assembly lines.<\/p>\n

Because they\u2019re tailored to meet the business\u2019s requirements while respecting the owner\u2019s property rights, commercial leases are negotiated from scratch. This lack of standardization means business owners and landlords need to exercise due diligence before signing a contract that can bind them for years.<\/p>\n

Coming to Terms<\/strong><\/p>\n

The renter\u2019s monthly payment must be affordable, and the contract should state what that payment covers. Some landlords include the cost of property insurance and taxes, utilities and maintenance in a commercial lease, while others bill tenants separately for these expenses. In the latter case, the landlord should explain how these costs are calculated.<\/p>\n

The amount and frequency of rent increases, or escalations, should be addressed: Some landlords specify dollar amounts, while others tie hikes to an objective yardstick like the Consumer Price Index.<\/p>\n

The lease term needs to be long enough to provide stability but short enough to free the business if it outgrows the space or finds it unworkable.<\/p>\n

The contract should list all necessary improvements to the commercial space and identify who\u2019s responsible for doing and paying for buildouts and who owns permanent fixtures when the business leaves. If renovations are required to make the space accessible to disabled customers or workers, the contract should state what they are and who pays the bill.<\/p>\n

The contract also needs language that clarifies:<\/p>\n