For small businesses, renting an office seems like the best way to keep costs low. When leasing a property, tenants often do not pay attention to all the details and end up not knowing what they are getting themselves into with the agreement. There are risks in leasing office space. With this guide, business owners will learn about some of these risks so they can mitigate them as much as possible.
Tenants Must Understand the Terms of the Lease Entirely
One of the biggest mistakes tenants make is not understanding the terms of their lease agreement. Tenants often think signing off with a lawyer ensures the lease agreement is without issue, but this is not always the case. It is the responsibility of the tenant to read and understand their lease agreement before signing. Paige & Campbell helps their customers protect their best interests in lease agreements.
Top Risks Tenants Face When Leasing Properties
While there are risks with any lease, it is especially important business owners are aware of the potential risks they face when leasing office space. The following offers information on some of the top risks tenants may face when leasing an office.
· Many tenants fail to realize the draft lease often differs from the final lease offer. Tenants must read both in their entirety. Some changes that are often made include signage rights and promised storage areas. Being aware of these changes will help tenants protect their rights and best interests.
· Permitted use can often stifle a business’ endeavors in the future. It is important to carefully inspect the lease agreement and ensure it offers scalability for changes that may be made to the business in the future.
· Another risk is the rent amount may not accurately reflect the final space if the property is under construction or being renovated. The rental price should never be stipulated until the building is complete.
· Additional costs may be required of the tenant without their knowledge. Tenants could be required to pay for the landlord’s legal costs, levies, and other expenses. Tenants must be proactive and ensure they know what is being agreed to in the lease.
· Other inclusions are also a source of risk for tenants. Sometimes, landlords will include clauses that allow them to terminate the lease if they decide to redevelop the building. Such an inclusion could lead to a great level of stress for tenants, especially if they are ignorant of this inclusion.
Renter’s Insurance Is a Must
Aside from failing to understand the confines of their lease agreements, tenants often fail to purchase renter’s insurance. Although a landlord likely covers their property with landlord insurance for damages and liability, this coverage does not cover the tenant’s belongings. It is imperative tenants protect themselves by purchasing full renter’s coverage when leasing any property.
Tenants Must Be Responsible
Reading the lease agreement in its entirety is essential for tenants. Signing a legal contract without being aware of the contents can be disastrous. Tenants should ensure they are aware of all the inclusions in the lease. If there are any areas of issue, these should be discussed with the landlord and corrected before the lease is signed. Taking time to read and understand the lease contract will help to prevent issues in the future that could become more than a simple annoyance for tenants.
