Home Real Estate What Factors Should You Consider Before Signing a Contract For a Commercial Property For Lease 

What Factors Should You Consider Before Signing a Contract For a Commercial Property For Lease 

by Danny White

If you have never signed a contract for a commercial property for lease before, you may assume that the lease is fairly straight forward, much like a residential one. But, commercial leases are very different than residential ones, and they can be much more complex. This is why it can be beneficial to have a commercial real estate agent assist you by helping you to find a property, reviewing the lease with you, and answering any questions you may have about the terms of the lease. Here are three factors that you should always consider before signing a contract to rent a commercial property. 

What the CAM Fees Cost

When it comes to commercial properties, you may be expected to pay for more than just the rent on the space you are renting. Many commercial leases list an amount that you will have to pay for CAM fees, or common area maintenance fees. CAM fees typically cover common areas shared among commercial tenants, including the parking lot, outdoor smoking or break areas, or a reception area shared among office space tenants. CAM fees may also include commonly shared services, such as cameras and security guards. CAM fees may be paid monthly, quarterly or yearly, so review a lease before signing it to find out how much these fees are and when you are charged for them. 

The Length of Your Contract

Another important factor to consider before signing a lease for a commercial property is the length of the contract and rent increases. Many commercial contracts are much longer than residential contracts. They often have renewable lease options, allowing you to re-up your lease after one year, five years or ten years. Commercial contracts also lay out rental increases, so there are no surprises in the future. 

If There Are Any Non-Compete Clauses

The last element that you need to carefully look at and consider before signing a contract for a commercial property for lease is whether there are any non-compete clauses. A non-compete clause may dictate what services or goods you can or cannot sell. For example, if there is already a haircutting salon in the shopping center, they may have a non-compete clause so no one else can open a hair cutting salon. Some businesses also narrow down their services. For example, a nail salon may do nails and may offer waxing services. If your haircutting services also wants to wax, but there is a no compete clause in place for waxing, you cannot offer it. This can impact your business so always carefully review this section. 

Once you have found the perfect commercial property for lease for you, you need to carefully review the lease contract and ensure you understand every part of the lease. If you need help finding the right property to rent out or you have questions about a commercial lease, a commercial real estate agent can help you. Contact one today to begin the process.