Here are two final red flags to be on the lookout for as you negotiate your office space lease:
Red Flag #4: A Bad Relocation Clause
A relocation clause will always favor the landlord, since it gives the landlord the right to move your business to a different space within a building if a tenant with a bigger business needs your space. Though you will not be able to do away with this clause, remember that you do have a right to ask for certain provisions. Make sure you get a written statement that your landlord will pay for the relocation and any renovations required. Ask to maintain the same structure and quality of space, plus the same rent, and insist on at least one month’s notice before you have to move.
Red Flag #5: Short Terms and Unclear Renewal Clauses
Unless you are positive you only need a space for a short period of time, make sure your lease offers the option to renew. Renewal options should be clearly defined and state how much time you need for renewal as well as a percentage of how much rent might increase. Options to renew give your business flexibility, so opt for those over long-term leases if you are a start-up company not wanting to make too long of a commitment.
Negotiating and understanding a lease can be a tedious process, but it is essential to making sure your business does not find itself in financial trouble down the line. Take the time to do your research and even talk to an attorney about what you want—and don’t want—in a commercial lease.