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Reviewing the terms of a commercial lease

On Behalf of | Apr 28, 2022 | Real Estate

It’s not uncommon for business owners to opt against purchasing a piece property to work out of, due to the financial obligations associated with property ownership. Instead, they may choose to rent a location where they may share the costs of maintenance and repairs with a landlord.

First-time tenants should know that they are often able to negotiate the terms of a commercial lease that a property owner presents. They are not obligated to sign the first lease put before them.

Amenities that may entice

These days, many property owners may try to “sweeten the pot” with attractive amenities in order to attract quality commercial tenants. Parking for the business’s customers, 24/7 maintenance and keeping inside and outside common areas clean and free from hazards may not be enough anymore. Potential tenants want security, good access to public transportation, nearby healthy food options, fitness options and more.

Weighing the trade offs

A prospective tenant should not get too caught up in the amenities, however. How much will a property owner expect a company to pay for these conveniences? While some tenants may be willing to pay more for them, the total rental amount should not be cost-prohibitive. If the rental payments break the budget, the business may not succeed in that location.

In addition to the rent, tenants should also pay close attention to:

  • The duration of the lease
  • Responsibility for repairs and improvements
  • Who pays for what when it comes to routine monthly costs like insurance, utilities and more

A commercial lease should accurately and precisely outline the relationship between the property owner and the tenant. Less ambiguity could forestall any potential disputes between the parties in the future.

Moreover, the landlord will be looking out for their best interests, so it is vital that a potential tenant do the same by having a real estate lawyer review every provision in the lease, including the fine print. A lawyer can also work to negotiate more tenant-friendly terms that provide a better chance of success in a particular location.

Resources

Office of Public Accountability – OPA.  After an agency makes a decision regarding a problem with the bid, the next step is the OPA.  The decision here is required before litigating further.  The OPA Rules of Procedure and docket are available here.

Office of the Attorney General – AG.  The AG’s office has the latest procurement issue interpretations, opinions, and procurement forms.

Guam Procurement Statue – GCAs

Guam Administrative Regulations – GARs