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Office Leases Guide for Tenants

Office Leasing Tips for Tenants

Your company has found the right new office space for your business and you are excited about the future. This is how it should be - but Tenants need to be aware of signing an office lease that leaves them either financially or operationally exposed.

For many companies, an office lease will be one of the biggest financial commitments that they make (for example the basic financial liability when signing a 5 year lease with an annualized rent of $50,000 is $250,000 - and that excludes taxes, fees and any other costs of occupying office space). But an office lease is far more than just negotiating hard on the office rent you will pay to the landlord. Experience shows that office leases can be notoriously hard to get out of without incurring significant expense (and hassle).

This article focuses on the legal issues of moving office - with some useful tips that tenants need to be aware of before they sign any office lease documents.

Office Leases are Legally Binding Documents
Simplistically, an office lease is a contract in which the Landlord (the owner of the property) grants your company (the tenant) the exclusive right to use all or some of the property in return for agreed payments of rent.

If it isn't in the Office Lease Agreement then it doesn't exist
Do not rely on anything that has been orally communicated to you by the landlord - before, during or after the office lease is signed. You want everything that has been agreed to be reflected in the signed office lease (as this is the document that will be used to resolve any disputes that may arise during the course of a tenancy).

Get Representation
In almost every case the Office Lease will be drawn up by the landlord and submitted to you for review and signature. You must resist any temptation to sign the office lease until you have had it cleared (and probably renegotiated) by your own commercial real estate attorney.

Commerical Real Estate Lawyers
They are the go-to people when it comes to safeguarding your company's interest in the negotiation of an office lease. They need to form a key part of your overall office relocation team. Their main function is to ensure that the terms agreed between you and the landlord are reflected in the signed office lease. They will negotiate the detail of the office lease to minimize your exposure to potential liabilities during the course of your tenure. They will also make sure that you are fully aware of your on-going Tenant responsibilities that are included in the lease documentation.

Signing Office Leases - Best Practice

  • Never sign any office lease document that you do not understand
  • Always get legal advice from a Commercial Real Estate Lawyer

 

Planning an office move? Go the office relocation planning resource center

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