Most businesses don’t own the premises they work from, but lease them. A property lease is much cheaper than an outright purchase and you have the option of not renewing it when the time comes if you think your business could do better in a different area. It is important to consult property lawyers before signing the lease, especially if you don’t know much about them.
Here are some lease issues to consider before you sign on the dotted line.
- Make sure the term of the lease is long enough for you to recoup the investment and make a profit. Landlords are under no legal requirement to renew the lease. Plus, when they do renew they have the right to increase the cost.
- Ensure that your lease gives you the option to renew if you want to. A lot of time and effort is involved in moving everything to another location. Besides, the goodwill you have established may be attached to the location and you’ll lose it if you move.
- A minimum tenancy of 5 years is provided for in many commercial leases. If it is not, you have the statutory option to renew, but the landlord must be advised of this at least 30 days before the lease is due to end. It must be written onto a form called Notice of Exercise of Option.