Consider These Things BEFORE Signing a Commercial Sublease
You’re in the market searching for the perfect space for your commercial business and you come across a sublease. What’s the difference between that and a regular commercial lease?
Commercial leases are confusing enough, but is there more you need to know about a sublease?
First, subleases are written by a tenant that already has a lease with the landlord. If their contract with the original landlord permits, the tenant can rent out a part of or the entire space they lease from the landlord and they become the sublessor. If you decide to sign the sublease, you become the sublessee.
Although it may sound simple and straightforward, you still need to make sure your rights are protected under a sublease and the terms are clear. Once you start digging in, you may realize there’s more to it than you originally thought.
That’s why using a commercial real estate agent when searching for or considering signing a sublease is so important. There are lots of terms and conditions hidden under legal jargon that may be confusing or surprise you later down the road.
Having representation to help negotiate a sublease ensures you have a clear understanding of your contract and what you are liable for. Not all real estate agents have the experience necessary to help you negotiate a commercial sublease effectively though.
Make sure the person you choose to work with has the expertise it takes to help set up a contract with terms you’re comfortable with. An experienced agent can even help you negotiate a better deal than you would on your own. Here’s a closer look at how using a commercial real estate agent can give you peace of mind when signing a sublease.
Find the Perfect Sublease For Your Business Quickly and Easily
Starting a new business is an exciting venture and Austin offers many unique spaces that may be suitable for you. Whether you’re seeking a space with high traffic and surrounded by thriving amenities or a quieter industrial location, Austin has a lot to offer.
Using a commercial real estate agent ensures you’ll get access to the most up-to-date information on spaces available. Your agent can not only guide you through the process of finding the perfect space, but they can also negotiate the terms and conditions of your lease or sublease on your behalf.
You’ll have expert guidance on what to include in your lease to keep yourself protected and someone to answer the most important questions.
Some people may think using an agent is an unnecessary added cost, but paying close attention to the terms of your sublease now can save you a lot of trouble later. Of course, the choice is yours. If you do decide to sign a sublease on your own, make sure to avoid these common mistakes of subrenters.
Get Expert Guidance to Avoid These Common Mistakes when Signing a Commercial Sublease
A sublease is a legal contract between you and the sublandlord and is a binding document. Make sure you pay attention to the fine print and negotiate the terms carefully. Here are some of the top mistakes subrenters make when signing a sublease.
Assuming the sublessor has the right to sublease
Although this issue is between the sublessor and the original landlord, it can still affect you. Just think, you sign the sublease and move into the space only to find out the landlord has the right to terminate the entire contract.
Not only have you lost the space you carefully picked out, but you’ve wasted time, money, and valuable resources too. Make sure there are no issues between the landlord and the sublessor before signing a sublease.
Failing to include a clause to get out of the contract
In business, lots of things can happen and the economic environment can be hard to predict. Maybe your business grows quickly and you need to expand. Or something unexpected happens and you need to downsize.
Whatever the reason, there may come a time when you need to get out of your sublease. Either keep the lease term shorter or build a clause into the contract that gives you an option to find another sublessee to take over your contract.
Relying on someone’s word for approved zoning
Make sure to check with city officials that your business is approved for zoning. This is a big one. Even if the sublandlord really thinks it’s approved for zoning or was running similar operations, run it by the city first. Otherwise, if it turns out you weren’t approved – you’re the one that gets slapped with a fine and stuck in a lease.
Assuming you’re signing a standard lease
When it comes to commercial leases, there really is no such thing as a ‘standard’ lease. This makes it even more important to pay attention to the fine print and make sure you understand everything that’s in the contract. If sifting through legal jargon is difficult, it’s crucial you consider getting representation.
Not paying attention to maintenance fees
Many commercial leases use terms like CAM (common area maintenance) fees. Pay special attention to sections like these and make sure you understand clearly what you are responsible for maintaining.
Typically, you are responsible for the percentage cost of the building in relation to the percent you’re renting out. Because these fees can be unpredictable, you might consider negotiating a cap on the percentage increase from year to year.
Also, pay close attention to any section of the sublease that refers to capital expenditures. These often refer to major structural repairs like the roof, foundation, or HVAC system. Limit your liability to a maintenance contract, otherwise, you could be on the hook for the entire replacement costs.
When it comes to negotiating sublease terms and conditions, there’s a lot more than initially meets the eye. If you want to set yourself up the best way possible, make sure you choose a commercial real estate agent you can trust to represent you. Here’s how to contact a reputable expert and get help with your sublease.
Obtain the Ideal Commercial Space for Your Business Today!
Commercial Lease Locators has helped numerous business owners just like you secure an ideal location and can help you navigate the terms of a sublease carefully so you’re protected. We can guide you through the process from start to finish and answer all your questions.
Fill out the easy online form below or call 512-920-6270 to speak to an experienced commercial real estate agent today. Just tell us the type of space you’re looking for, the size, and the ideal location to get started.