Commercial leases can be full of terms and provisions unfamiliar to the average business owner, but it is important to have some knowledge of this jargon to be able to negotiate a good deal for your lease. Here are a few of the most common lease terms to have on hand as you begin your search for commercial office space for rent in Overland Park, KS, as described in the article “Common Lease Provisions”:
- Assignment or Subletting – Discusses the tenant’s right to assign the space to another tenant or sublease it temporarily if they cannot afford to stay for the entire lease term or want to rent out some of the space. In an assignment situation, the tenant passes all of the lease responsibilities to the new party, but in a sublease, the original tenant is still on the hook for making sure the lease provisions are honored.
- Condemnation or Destruction – Outlines both parties’ rights in the event that the government takes the property through eminent domain. This clause stipulates that the landlord must rebuild if the property is destroyed, and it outlines rent reduction possibilities or the tenant’s right to terminate the lease if the property is destroyed.
- Competition – Prevents the landlord from leasing nearby spaces in the property to your competitors.
- Escalation – Common in most leases, this clause discusses annual increases in rent, either based on the landlord’s operating costs or an external index.
- Enforcement – Discusses the enforcement of lease terms, who is responsible for attorney fees and possibly the course of action in a dispute, i.e. mediation or arbitration.
- Grace Period – States specifically how much time the landlord or tenant has to comply with a lease term, for example to correct a defaulted rental payment.
- Insurance – Discusses who should be responsible for insurance coverage and liability.
- Landlord’s Solvency – Describes the rights of the tenant if the landlord is financially unable to keep ownership of the property.
- Option to Purchase – Gives the tenant the opportunity to buy the property when their lease is finished, and should state the timeframe in which this purchase can take place and the price.
- Option to Renew – Stipulates whether the tenant can renew their lease at the end of their term, and what the new term and rental rate will be.
- Property – This clause describes in detail the rental property: square footage, means of measuring square footage, address, suite number, city, state and zip code. This section should be gone over carefully to check for any mistakes since the lease is binding, regardless of the correctness of this information.
- Tenant Improvements – Discusses the tenant’s rights to improve or build out on the property, and who is responsible for the costs of those improvements.
- Termination – Describes the termination of the rental contract and what condition the property should be in when the tenant returns it.
- Use of Premises – Clearly states what the tenant can or cannot use the space for.
Remember that commercial leases for office spaces for rent Overland Park, KS, are negotiable, so you can push for more favorable terms on things like assignment or subletting, escalation clauses, grace period or the option to renew. Working with an experienced commercial real estate attorney might also be in your business’s best interests, especially if you are new to the commercial real estate market. Commercial real estate can be complicated, and you don’t want your business bound to a lease with mistakes or stuck in unfavorable terms for the next few years.
Is your business interested in office space for lease in Kansas City or office space for lease in Olathe, KS? Give one of our commercial real estate brokers a call at 913-685-4100 for more information or to set up a tour of a Kansas office space for rent.