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What should a new business owner consider before signing a lease?

On Behalf of | Feb 14, 2022 | Real Estate

A new business could require some time to establish a strong track record. Startups may risk not generating enough revenue to comfortably meet monthly expenses at first. As a new business owner, however, you may search for properties owned by landlords willing to negotiate a lease’s terms.

As noted by Business News Daily, commercial leases may last between three and five years. Commercial tenants may also take on responsibility for a portion of the property taxes. Because your new business may enter into a long-term relationship, you may prefer to rent from a flexible landlord.

What may the terms of a commercial lease describe?

Before signing a lease, you may review its terms and discuss possible changes. In addition to the rental amount, commercial leases could outline additional expenses that tenants must pay. They may also describe a tenant’s liability for repairs, parking and utilities.

A lease could require you to pay for “umbrella costs,” which may include your rental unit’s maintenance and insurance. Additional or unnecessary expenses may, however, cut into your profit margin. If the costs vary from month to month, you might have less stability while growing a new business. You may, however, find your landlord open to altering certain contract terms.

How may a lease protect me during a business downturn?

To help reduce your personal liability, you may negotiate terms that address a business downturn or failure. You may, for example, discuss your rights to sublease or share your space with another business owner. Commercial leases may also contain clauses for transferring a contract to another tenant. A transfer arrangement could provide an option to end your agreement without breaching it.


Business owners seeking commercial rental space may discuss the terms of a lease. Before signing an agreement, an effective negotiation may help counter some of the risks a new business may face.