Before you sign a lease, you need to make sure that there are not any bad terms in the lease that could come back to hurt your business. If you are unsure of what anything in your lease really means, consulting a lawyer might be a good option, but here are a few more major “red flags” to be aware of as you review the lease on your own:
- Unclear Renewal Clauses or No Renewal Option – Unless you are absolutely sure that you only want a space for a short period of time, you will want to avoid signing a lease that does not give you any option to renew. A lease with a renewal option should clearly address the length of your renewal term and the exact rate of rent increase you will have to pay.
- Oral Transactions – Do not make an agreement based off a landlord’s “you can trust me.” You will want to get all of the terms of your lease in writing to protect both you and your landlord. If a landlord tells you that they always fix things, but does not want to put it in writing, you run a huge risk of things not getting fixed to your satisfaction—and the same goes for renewal terms. Any future promises should be spelled out in the original lease. Remember that this is a business transaction, and a good businessperson will understand that things need to be put properly in writing.
Keeping an eye out for these and a few other red flags could save your business from dealing with some major issues later on in your lease.