Choosing a location is an important business decision.
The lease attached to that location deserves equally careful consideration.
A commercial lease can influence operating costs, growth options, property responsibilities, and future flexibility for years.
Before signing, Arizona business owners should understand the provisions that shape the entire landlord-tenant relationship.
Understand the Rent Structure
Begin with the full financial picture.
Review:
- Base rent
- Rent increases
- Additional charges
- Common-area expenses
- Taxes
- Insurance-related charges
- Utilities
- Other operating expenses
Understanding how these items work together can help you evaluate the true occupancy cost.
Review the Lease Term
Consider how long you want to remain in the property.
Ask:
- When does the lease begin?
- When does it expire?
- Is there a renewal option?
- How is renewal rent determined?
- When must notice be provided?
A lease term should complement your business plan.
Understand Maintenance Responsibilities
Commercial leases can divide maintenance and repair responsibilities between the landlord and tenant in different ways.
Review responsibility for:
- HVAC
- Plumbing
- Electrical systems
- Roof
- Exterior areas
- Interior repairs
- Parking
- Common areas
Clear responsibilities make budgeting and property management easier.
Consider Improvements to the Space
Many businesses customize leased space.
The agreement should address issues such as:
- Approval procedures
- Construction responsibilities
- Improvement allowances
- Contractors
- Permits
- Ownership of improvements
- Restoration obligations
These terms are especially important for businesses planning substantial improvements.
Review Use Restrictions
The lease should allow you to operate your intended business.
Consider whether the agreement includes restrictions involving:
- Permitted use
- Signage
- Hours
- Parking
- Exclusivity
- Alterations
- Subleasing
Your lease should support the way your company plans to use the space.
Understand Assignment and Subleasing
Business circumstances can change.
You may sell the company, relocate, expand, or restructure.
Assignment and subleasing provisions can influence your ability to transfer or share the space.
Understanding these provisions before signing gives you a clearer picture of future flexibility.
Review Insurance Requirements
Commercial leases commonly include insurance provisions.
Work with appropriate professionals to understand the required coverage and how responsibilities are divided.
Understand the End of the Lease
Review what happens when the lease expires.
You may have obligations involving:
- Notice
- Repairs
- Removal of improvements
- Property condition
- Holdover
- Final payments
Planning ahead can help make future transitions smoother.
Frequently Asked Questions
Should an attorney review a commercial lease before I sign?
Legal review can help business owners understand obligations, negotiate terms, and identify provisions that deserve additional attention.
Can commercial lease terms be negotiated?
Many commercial lease provisions may be negotiated depending on the property and transaction.
Does Counxel handle commercial leases?
Counxel assists Arizona businesses with commercial lease review, negotiation, purchases, and related real estate matters.
Make the Lease Support Your Business Plan
Your location should help your business grow—and your lease should support the way you plan to operate.
Before signing or renewing a commercial lease, contact Counxel Legal Firm to review the agreement and understand your options.
