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Office lease checklist

 

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Office lease checklist This office lease checklist consists of items which should be considered when you want to lease a space for your business. This checklist is not a documentary agreement template, but rather a listing of recommendations to study when selecting an appropriate office, conducting negotiations, and finally things to include into agreement.


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Research on the space before signing up the agreement:

  • Get clear on your requirements to space.
  • Make a comparison on rates in different locations, find an optimal solution.

If business centers, companies and landlords which grant space on lease have their web-sites, then you may find there calculators which could show you approximate costs for your case. Also, there you can find applications and sample.

  • Define the rentable square footage/metric area.
  • Define the usable square footage/metric area.
  • Define if costs are based on usable or rentable square footage/metric area.
  • Gauge the space and verify if numbers provided by the landlord match your numbers.
  • Ensure there is enough space for your business activities (for its current state and for purposes of further development).
  • What kinds of use for the office premises are permitted and restricted.
  • Ensure that space is really sufficient for your business organization.
  • Ensure that there are enough individual offices, work areas and storage space.
  • Ensure that adequate parking space is available for your customers and employees.
  • Research on the transportation routes.
  • Ensure if communication services necessary for your business are available.
  • Ensure that all utilities required for successful running of your business are available.
  • Ensure that all facilities required for comfortable work are available.

All-round analysis:

  • Make clear the nature and duration of the lease.
  • Define the lease commencement and the lease termination dates.
  • Make sure that you understand the terms and the mechanism of renewal options.
  • Does the landlord have the right to terminate early without cause, and do you as a tenant have the right to terminate early by payment of a fee?
  • Ensure that you completely understand when you are entitled to possession and use of the property.
  • Research the rent nature and specifics, including allowable increases and method of computation.

For example, if you deal with lease agents, they may include their commission into rent amount.

  • Formulate within the lease contract when the rent is due and how it should be paid.
  • Clarify if this is a gross lease covering utilities, taxes and maintenance, or if this is a net lease meaning that you will be charged for these things separately.
  • Does your contract permits possible changes in the business?
  • Find out if there are possibilities for subleasing the space you don’t need within the duration of the lease.
  • Clarify the listings – what exactly is included into leasing package.
  • Research landlord’s warranties.
  • Research the insurance which the tenant and the landlord are required to maintain.
  • Make your insurance agent review the insurance requirements in the lease.
  • What is the amount of security deposit?

Can it be a letter of credit? Is there interest on the security deposit? The landlord must return the security deposit to the tenant within certain number of days after the termination of the lease.

  • Determine if there are any restrictions on the landlord's ability to lease place to your competitors (if you lease a retail space).
  • Determine your remedies for a case when competitor moves closely to you.
  • Determine the general physical condition of the space when you move in and in what condition you should leave it when you move out.
  • Find out if your lease terms allow you to make the improvements and try to get them compensated after the termination of your lease.
  • Clarify what responsibility the tenant and the landlord have for repairs or replacements.
  • Check out landlord's financial condition – if the landlord is able to execute all obligations for maintenance and upkeep.
  • Clarify rules and regulations for the building.

Probably there are specific rules and regulations. Know if the rules can be changed without tenant’s (your) approval. Make clear if there are any rules that regulate or conflict with the expected operations of your business.

  • Involve a qualified lawyer to compose form, or to check the one offered by a landlord.


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