Questions to ask before signing a commercial lease

You have a solid idea for a new business, and now, you need to find a place from which to run it. Commercial leases are often considerably different than residential ones. In many cases, commercial tenants have far more responsibilities than residential tenants. Thus, it is always a good idea to make sure you thoroughly understand the terms of a commercial lease agreement before signing it. Failing to do so can potentially land you in considerable trouble somewhere down the line.

Asking for clarification on anything open to interpretation is always smart before signing a commercial lease. It may also benefit you in the long run to ask the following questions.

Who pays property taxes?

As a commercial tenant, you could potentially be on the hook for federal and state income taxes and franchise taxes related to your rental property. To make sure you do not find yourself facing an unanticipated tax bill, make sure you fully understand your tax obligations before you agree to lease a commercial space. It may, too, serve you well to make sure any tax obligations you have during your lease term will effectively end once the lease term ends, as this is not always a given.

Who is responsible for maintaining habitability?

When you sign a residential lease, you can reasonably assume that your landlord will take responsibility for keeping the space habitable, meaning that he or she maintains responsibility for fixing leaks and otherwise conducting necessary repairs. The same does not necessarily hold true in commercial lease agreements, though, so make sure you understand whether you or your commercial landlord will assume responsibility for repairs and maintenance.

Ultimately, the better you understand the terms of your commercial lease, the less likely you are to encounter unexpected expenses or conflicts. Anytime you are unsure about something your commercial lease agreement dictates, make sure to ask for clarification.

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