Choosing and leasing a location for your business is critical. Your type of
business will dictate many of your decision-making factors. For example, a
retail business that is dependent on walk-in traffic means that you must have a
location where there are many people who have an interest in your product or
service.
Here
are some additional factors to consider in choosing a location.
Location issues
Item
Comments
Is there adequate
space for current and future levels of business?
Is the space
appropriate for your business? Does it have enough private offices,
work areas and storage space?
Is there adequate
parking available for customers and employees?
Is traffic
congestion a problem?
Does the location
suite the commuting needs of employees?
What types of
communication services are available? If your business uses the
Internet, are high speed services (T-1 lines, DSL or cable modem)
available? Ask other tenants what they are using.
Is the space
conducive to your type of business?
Lease issues
The
checklist below addresses some of the most common issues that arise when a lease
is being negotiated. Understanding all the lease terms can make the negotiation
process easier for both you and the landlord. Depending on your level of
comfort, you may want to have a qualified attorney help you work through the
leasing process.
Lease provision
Issues
Comments
Nature and duration
of the lease.
Be sure to
understand the term of the lease and the mechanics of any renewal
options. Also be sure to completely understand when you are entitled to
possession and use of the property.
Rent
In the lease
contract, make sure it is clear when the rent is due and how it is to be
paid, along with the actual amount to be paid. You should also be sure
to understand if there is any "pass-through" of increased property taxes
or maintenance costs.
Competition
If the space is
being used for retail purposes, such as in a mall or strip shopping
center, are there any restrictions on the landlord's ability to lease to
your competitors. What are your remedies if a competitor moves in
close-by?
Subletting
Do you have the
right to sub-lease space if you find you don't need the space within the
duration of the lease?
Physical condition
You may want the
landlord to make certain improvements before you move in. This may
include changing walls or electrical connections. What will be the
general condition of the space when you move in and what condition must
you leave it in when you move out?
Improvements
You may wish to make
improvements to your space during your lease. You may need additional
offices or just want new carpet. Be sure your lease allows you to make
the improvements and try to get compensated for these improvements at
the termination of your lease.
Landlord’s financial
condition
Will the landlord be
able to deliver on all of his obligations for maintenance and up-keep?
The real estate market is usually cyclical and some protections in the
lease for your rights may be attractive.
This
checklist is not all-inclusive. You may want to use checklists found in many
reference books or on the Internet to make sure all of your issues are covered.
Your lease is important. So is the relationship with the landlord. A good
working relationship will make the call about the leaking roof easier to make,
and a good relationship may get the air conditioner repaired just a little
sooner.
Member FDIC.
Equal Housing Lender.
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the Temporary Liquidity Guarantee Program.Funds held in
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insured by the FDIC.
Equal Housing Lender.
This institution participates in
the Temporary Liquidity Guarantee Program. Funds held in
non-interest bearing transaction accounts at this institution are fully
insured by the FDIC.