What You Need to Know About Your Commercial Lease
Whether you are evaluating a new office for an upcoming move or have been in your space for several years, understanding the terms of your commercial lease is crucial to knowing what is required of you as a tenant. Your lease outlines what you will receive from your building in terms of space, amenities, and what you will pay for them. It also contains critical information about your responsibilities for managing the space and the stated role of your building’s management.
Unfortunately, leases are notoriously lengthy, confusing, and often give advantage to the landlord. While it is standard practice for a company’s lawyer to review a lease before signing, they are often looking for specific language around liability and risk. As the tenant that manages daily facilities operations, you should familiarize yourself with the terms used in a commercial lease, the types of commercial leases available, and make sure you understand the lease’s implications and cost for space management.
To help our clients determine which services they need for their space, we have reviewed hundreds of leases from a facilities management perspective. When reviewing your lease, we recommend paying attention to details about the following:
- Certificate of Occupancy: Details the types of activity allowed in the space
- Insurance requirements: The type, and level, of insurance you are required to purchase in order to occupy the space
Space Upkeep and Improvement:
- Cleaning and maintenance schedule: Outlines your requirements for maintaining the space
- Trash removal: Explains which party is responsible for trash collection (and any schedule requirements)
- Pest control: Often the tenant is responsible for keeping the space pest free
- HVAC maintenance: Outlines responsibility for HVAC maintenance
- Many buildings do not provide HVAC services
- Landlord may require that their tenants have a signed contract with an HVAC service provider before they move in
- Tenant can be liable if HVAC is not maintained properly
- Life and safety systems: Refers to fire alarms, sprinklers, and fire extinguishers and how these must be placed and maintained
- Exterior areas: Identifies tenant’s responsibility for maintenance
- Exterior window washing
- Maintenance of sidewalks and outdoor spaces
- What type of signage is allowed
- Alterations and Improvements: Rules about construction and renovation
- Surrender of space: The condition the space must be left upon your company’s departure
- Requirements for repainting and wall repair
- Outlines whether non-structural construction will need to be dismantled
- Often notes that anything left in the space becomes property of the landlord
Vendors and Services:
- Explains vendor approval process for the building
- Outlines any restrictions on vendors who can serve the building
Pay close attention to any riders in the lease, which landlords use to customize standard language. These riders outline specific rules and stipulations for use of the space and building, which override any details within the lease. They may also contain further details about maintenance and upkeep schedules and building requirements for move in and move out.
When you’re busy managing operations or preparing for a move, it can be easy to overlook important details, understanding your commercial lease is crucial for accurately planning the services, and budget, you will need to run your office effectively. Fully understanding your lease will enable you to better able to evaluate the true cost of your potential office space or evaluate where you could save on services and upkeep in your current space.
If you are moving into a new office or looking to optimize your current space our facilities experts can analyze your lease and build a comprehensive solution for running your office. By evaluating several services at once, we can help you consolidate vendors, minimize liability, and maintain a good relationship with your building—which could save you money in the long term.