5 mistakes to avoid when signing a commercial lease

Signing a commercial lease is an exciting milestone for any business but it's important to tread carefully. In the rush to secure a great location, it's easy to miss some of the finer details that could lead to headaches down the road. To help you avoid common drawbacks, we’ve put together a list of five mistakes to steer clear of when signing a commercial lease.

Not understanding the lease

One of the biggest mistakes when signing a commercial lease is not fully understanding what's in the document. Think of it like this: a commercial lease is a commitment, similar to getting married. You wouldn't walk down the aisle without knowing everything about your future partner, right? The same principle applies here.

You need to understand the lease duration, rent details and who is responsible for maintenance and repairs. These details are the backbone of your agreement, so make sure you're clear on all the specifics to avoid any unexpected costs.

Not getting everything in writing

It might seem obvious, but one of the most overlooked steps in signing a commercial lease is ensuring every detail is documented in writing.

A commercial lease should clearly document everything: when your lease starts and ends, how much the rent is, when it's due and under what conditions it might go up. It should also specify the security deposit amount, the conditions under which it will be returned and any deductions that might apply. Furthermore, it needs to address all terms and conditions pertinent to your lease, like maintenance duties and rules for subletting.

Having all these details in writing ensures that both you and the landlord are on the same page, minimising misunderstandings. It’s not just about avoiding disputes; it’s about ensuring clarity and peace of mind. Written agreements are a safeguard, a reference point to protect both parties.

Not getting legal advice

Signing a commercial lease without getting legal advice is a risky move. It's easy to think you can handle it on your own, but leases can be full of complicated terms that could cause problems.

Having a qualified property lawyer look over your lease can make a big difference. They can explain the terms in plain language and point out any risks or opportunities that you might miss. Think of them as your guide, helping you avoid potential issues.

Not being prepared to walk away

Remember to keep your options open. If the lease terms aren't working for you, don't be afraid to walk away.

Accepting a lease with terms that don’t fit your business can lead to issues. You might end up in a space that's not ideal, costing you more money and stress. This can turn what seemed like a good deal into a massive problem.

Falling for the "base rent" trap

It's easy to get distracted by the base rent in your lease. That monthly figure is tempting but it’s just the beginning of your financial commitment.

It’s important to think about service charges. These are the costs of keeping the place tidy, covering cleaning, security and repairs. They can stack up depending on where you are and the size of your space.

You will also need to consider local taxes, like council tax and other levies, which vary by location and can add a large sum to your overall expenses. Before you sign anything, make sure you understand all the potential costs involved.