Monday, May 7, 2012

Leasing Commercial Real Estate Steps - Advice, Negotiations, Forms and Handover

If a business is trying to enter into a commercial office lease, the ability to select and negotiate for this space is very important. Anyone armed with the right information can enter into a standard commercial office lease.

Leasing commercial office space is faced by many companies and requires a concentrated effort to reach the best decision possible. So much depends on the success or failure of reaching a resolution of this issue. If the right site has been found, then is the time to consider that selection and what would be included in a lease agreement. This would be followed by looking at the site to see if it is truly well- suited to the company.

If the site appears to be the right one, documentation must be secured to begin the process of composing the necessary parts of the leasing contract. This should be done right away so that both parties in the agreement will have adequate time for a thorough review of that documentation.

Following is more detailed information in the form of successive steps that can be taken to help a potential tenant be sure that nothing is forgotten in the leasing process.

Step 1: Seek Expert Advice

Signing contracts and agreements can be very risky if a business does not understand the basic elements. All terms and conditions relating to the lease should be clarified and understood by the landlord and the tenants. If any problems are encountered, it is highly recommended to seek legal advice. Everything should be clear, outlined and mutually agreeable.

Step 2: Negotiate Commercial Lease Terms

This is the most important step in the leasing process. Procedural guidelines must be developed, trust established, and all relevant facts clearly outlined while negotiating the agreement. One important thing to consider is whether or not the meeting place is conducive to making a good decision. A good strategy is to select a place that eliminates distractions and interruptions.

Phases of Negotiation - There are different phases in the negotiations process as outlined below:


* Early Phase This is the time to probe for answers to any questions that either party may have and focus on the explanations being given. That way everyone who is involved must always listen carefully. It is in this phase that expectations are established.


* Middle Phase Delve into possible alternatives and understand the position of the landlord. It is in this phase that boundaries of issues are determined and the idea of forming an agreement is initiated. It is important to ask the reason behind the demands made by the landlord; the leasing business owner should also be prepared to provide reasons for any demands being made. Know exactly what is needed in the contract in order to reach an agreement. Then both the landlord and the tenant should review together what has been negotiated. Always validate that all problems are settled.


* Final Stage Always be available when the final documents are being processed.

Step 3: Improving Final Forms

After the bargaining process is done and the final documentation has been prepared for both parties, review and make sure that the terms and conditions stipulated on the document are clearly understood. Ensure that everything that was discussed and agreed upon during negotiations is included in the agreement. After signing the agreement, make sure to obtain a copy of the document.

Step 4: Handover Process and Fitting-out of Premises

The final step, after signing of the commercial lease agreement, is the transfer of the new property from the landlord to the tenant. Before this can happen, preparation of the property takes place. If approved as part of the contract, the business owner can redesign the lay-out of the office space or make improvements to the existing space, such as painting and ensuring there is good lighting. The property should be functional and appealing as this will affect the productivity of the business.

Leasing commercial property is a complex process. Consult a lawyer to explain any terms of the agreement that may be confusing. Never sign a contract if the terms and conditions are not well understood or agreed upon. Then the end result will be exactly what was desired!

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