If you're ready to sign a lease without having a tenant rep look at it, you're making a big mistake. It could be poorly written, and because your expertise lies elsewhere, you wouldn't even know it.
This could be disastrous.
It's even worse if you signed one without having a tenant rep broker strenuously advocate on your behalf. It's crucial to get the wording of your lease right because even a tiny mistake could cost you tens of thousands of dollars you shouldn't have to pay.
Renting a space for your practice is a big responsibility, and the success of your practice depends on having every single word of your contract written so that it benefits you the most. There's often sneakily worded language intentionally inserted into a lease to put tenants at a decided disadvantage. That's why it's imperative to have skilled representation when you're going through lease negotiations.
Otherwise, your landlord will take advantage of your naivete, and you'll end up paying a lot more than you should. So take out that lease you're about to sign or filed away and have a tenant rep who specializes in healthcare real estate take a look at it.
A commercial lease review is your chance to get yours carefully analyzed to make sure it's fair. Besides fraudulent behavior on the part of a landlord, circumstances continuously evolve, and you've got to make sure that your lease reflects your new situation.
If you've already signed a lease, having a free lease review will help you be prepared come lease renewal time. This will help you negotiate a contract that best suits your circumstances as well as meet all your needs.
How Commercial Leases Differ from Residential Ones
You might think that just because you negotiated the sale or lease of your home by yourself, you can do the same thing with the contract of your office space.
You'd be wrong!
That's because commercial leases are incredibly more complicated compared to their residential counterparts. They also have fewer consumer protections built in. For example, there's no limit to what a landlord can charge for a security deposit in a residential lease. And, there are no rules protecting a tenant's privacy either.
Another way they differ is that most commercial leases aren't standardized. Each one is customized according to what the negotiating parties want. If you didn't have a tenant rep in your corner during negotiations, chances are the landlord made sure it was written to only benefit him.
So, if you haven't signed it yet, have a tenant rep look at it right away. And if you already signed it, have a tenant broker look at it anyway. This is so he can give you expert advice you can put into play when it's time to renegotiate your lease.
When a tenant rep reviews your lease, he'll be making sure that you have a renewal option that's in your best interest.
Having one protects you when your lease expires by preventing your landlord from renting the space from under you. With a renewal option, you'll get first dibs on renting it again. However, you'll be required to let your landlord know six to 12 months before your lease expires whether you plan to renew at the end of your term.
Most often, the option includes a specific number of years for the renewal. This is usually between three and seven. It should also stipulate what the rental rate will be—whether that's going to be the market rate or something else.
Your rep can also negotiate for the right to cancel the option if you and your landlord can't agree on terms. Try to have your rep negotiate a short-term lease with options for renewal because your practice might expand much faster than you anticipated.
Another thing that could happen is your location might not work out for you, so sometimes, a short-term lease is best.