Starting your own small business or moving to a new location in Massachusetts can be an exciting time full of possibilities. You may have great plans for your business at its new location, and you may be eager to sign a lease and start as quickly as possible. However, it is important that you do your due diligence before jumping into a business transaction that places so much of your resources on the line.
Before you sign a commercial lease, you would be wise to take your time and perhaps even prepare a checklist of items to complete before putting your signature on a contract. One of the worst outcomes you can expect is to sign a long-term lease on a property and later discover the terms of the lease or the property itself is not conducive to your business’ success.
Finding the right place
Some business owners search for years before they find the ideal property for their businesses. You can use this time to do the following:
- Research the potential clientele in the area
- Understand the zoning laws in the area and how they might affect your business
- Learn whether there are any nuisance laws that may restrict your business, such as noise, odors or activity
- Find out whether your business will conflict with any environmental laws in the area
You will also want to investigate the reputation and history of the landlord. You can do this by speaking with other tenants and doing a simple background check to learn about the landlord’s financial status. A property owner who is in default on a mortgage may place your business in jeopardy if the property goes to foreclosure.
Reading the lease
The terms of a lease may be very general and broad, and that could be to your advantage. However, it is the fine print that may trip you up, and you would benefit from reading it carefully and possibly reviewing it with an attorney. Before you sign the lease, you will want to do the following:
- Understand the details of the rent, including what it covers and how often it will increase
- Decide whether the flexibility of a short-term lease or the stability of a long-term lease will most benefit your business
- Discuss with the landlord how he or she includes items like taxes, insurance, maintenance and repairs in your fees
- Learn about important elements like parking, security and utilities
- Ask if you have permission to modify the property to suit your business
These are only a few of the considerations to make when preparing to sign a commercial lease. You would be wise to undertake this complex transaction with the support and guidance of a skilled business attorney.