If your business has outgrown your den, you may be looking to rent commercial space. While the specific rights & responsibilities of commercial tenants vary from state to state, unlike renting an apartment, there aren’t myriad lease stipulations that the owner must adhere to. Therefore, it’s up to you to ensure you receive the best terms for you and your business. Bottom line: take the time to discuss all of the terms of the agreement before signing on the dotted line. This will ensure that you have the leverage you want throughout the life of the lease.

Before you sign the lease
When it comes to the lease, don’t go it alone. Consult with your attorney to review the document and prepare a negotiation strategy. Since there aren’t as many restrictions on commercial leases as there are on home properties, you have more room to discuss the terms of the lease. . The landlord is a businessperson too—he/she will start the bidding with terms most favorable to him or herself, but will likely meet you somewhere in the middle to make the deal.

Negotiating rent
Unlike rent-controlled apartments, commercial property owners can charge whatever they like. It’s up to you to find out how your rate compares to those of neighboring businesses. You want to negotiate on the following terms, even if you think the answer might be “no.”
–         Get a stipulation in writing about how often your landlord can raise the rent, on what terms and by how much.
–         The lease should state who pays utilities.

Insurance requirements
While the building owner has insurance to cover the property, this might not benefit you. Ask him/her if existing coverage will include any of your business assets (i.e., equipment, merchandise).  You may be able to negotiate for the landlord to handle some of the burden, but you should probably plan on purchasing coverage yourself.

Building repairs
The lease should state who is responsible for making repairs to the property. If property owner won’t cover them, at least negotiate reimbursement for necessary repairs.

Options to renew lease and purchase the building
How many years are you tied into your lease? Do you have an automatic option to renew? If you think you’d want the option to purchase the property someday, put it in writing. By doing this up front, it will likely help you get a better deal if and when the time comes.

Other lease considerations
Non-compete clauses, termination and dispute resolving conditions, expansion and subleasing options are other lease considerations that you and your lawyers should look at carefully before signing.
Don’t think of your lease as eternally bonding; you might decide to move your business, and you will certainly have a chance to renegotiate the lease down the road. For example, if changes in the neighborhood adversely affect the volume of people coming in the door, that’s a reason to try to have your rent lowered or to receive some other sort of compensation.