If you have to sign a commercial lease for your business, you are taking on a huge responsibility. After all, every rental agreement represents a long-term, expensive commitment. That's why it's especially important to look carefully to avoid unpleasant surprises for yourself and your company. With the following tips, you are on the safe side.
Most of us have already been acquainted with a private tenancy agreement, but not all of us with commercial tenancy agreements. Therefore, it is important to be aware of the specifics of commercial leases:
Commercial tenancy agreements are not subject to the special restrictions that apply to private tenancy agreements. The legislator assumes that the contracting parties are "equally strong" and therefore do not need to be specially protected from each other, as is the case with a contract between a business and a private residential tenant.
Contracting parties in commercial tenancy agreements are often partnerships or also legal entities.
The rent does not have to be a fixed monthly amount, but can also be linked to turnover. The landlord can set the rent independently of the local rent index.
In contrast to a residential lease, the purpose for which a commercial space is to be used is initially open: Practice, workshop, sales room, warehouse, office,... The "purpose of the contract" is freely agreed between the renting parties.
Often commercial premises must be individually developed by the tenant - and dismantled again after the end of the lease. This should also be regulated in detail in the tenancy agreement.
Businesses are interested in presenting themselves to the outside world: From company signs to illuminated advertising on the façade, everything is conceivable.
While fixed-term contracts are rare in private tenancies for obvious reasons, they are common in commercial tenancies, often with an option to renew included in the contract. -
As you can see: There are many more things to consider, discuss, document and stipulate in the contract for a commercial lease than in the case of a normal private residential lease. The checklist below will help you with this.
It sounds trivial, but it is very important: Both contracting parties (landlord and tenant) must be correctly designated.
To avoid objections from the landlord or neighbours later on, you should precisely record the subject matter of the contract and the rental purpose:
In commercial real estate, company names appear in various places: Illuminated advertising in front of the building, orientation boards in the corridors, lettering on doorbells and letterboxes, elevator lettering, etc. Clarify how these signs will be organised and what costs will be incurred.
In many cases it is also possible to have your own outdoor advertising, for example a neon sign in front of the window. You should also clarify this before signing the contract and have the landlord's permission recorded in the contract.
As mentioned, a turnover-based rent is sometimes possible instead of a fixed rent. This is especially interesting for businesses with public traffic (gastronomy, retail trade, etc.) if it is not yet clear how well the business will do at the new location. However, it must be remembered that in the case of a turnover-based rent, the landlord has the right to demand information about the turnover.
The term of the contract can be freely determined. As a rule, commercial leases are concluded for a fixed term. This is because few companies can predict exactly what their rental needs will be in five years' time - some are happy to look over a quarter!
Important: Try to include an option clause in the contract that entitles you to extend the rent after the expiry of the rental period.
The following data and documents are often required for the conclusion of a commercial lease:
Once you have successfully concluded a contract, you should not simply file the contract documents in a folder and delete them from your memory. Why not? If you later want to terminate or extend the tenancy, you have to meet the relevant deadlines. And if you miss these deadlines, your plans will burst like bubbles.
It is therefore a good idea to entrust the tenancy agreement, together with all the associated documentation, to a contemporary Contract management software management software. For example ContractHero. This software shows you all your contract obligations and notice periods at a glance. And because it's really fun to look at the dashboard, you'll never miss an important deadline.
That is good for you and good for your company.
Learn what contract management is and what to look for when choosing contract management software.