As a small business owner, you have to be careful when making business decisions as one wrong choice could cause issues for your business. That is especially true when it comes to finding a storefront for your organization. Where you end up could have a major effect on the success of your endeavor.
When you finally find the right space at the right price, do not be too quick to sign the lease. Entrepreneur warns that you need to carefully read the lease and make sure you understand everything that is in it. There are specific things that you need to note.
It is not uncommon for commercial real estate owners to sell their property. In the time you are under your lease, the property could switch hands multiple times. You need to know what happens to your agreement and your rights when this happens.
Most importantly, look for a clause in your lease that gives the new owner the ability to void your lease upon taking ownership of the property. You need to have security that you will not have a new owner kick you out or implement a new lease with unsuitable terms.
You should make sure the lease addresses what happens at the end of your rental term. You should never remain in a property without an active lease. Make sure the agreement allows for renewal of some type, whether it is signing a new lease or renewing the current one automatically.
A personal guarantee is when your landlord requires that you offer your personal word that you will be financially responsible for the lease even though it is in your company’s name. This is risky because it makes you personally liable. Make sure you have an easy out of your agreement that allows you to leave without penalty should your business have financial difficulties.