Negotiating a Commercial Lease in Virginia
Ryan C. Young | Richmond, Virginia Attorney
Although the economy is recovering slowly there are still excellent opportunities for small businesses that want to lease commercial space. The number one most important thing for a business to do is to have the lease reviewed by an experienced commercial lease attorney. A Virginia attorney familiar with commercial lease law will protect your interests as negotiating a lease can be an emotional experience and lease negotiating may be new to you. But, in all likelihood it isn’t new to your prospective landlord and what seems like an innocuous clause could be costly. Remember too, while residential leases are controlled to some degree by Virginia statutes, commercial leases are not, a bad lease can doom your business!
1. Hire a Virginia attorney experienced in commercial lease law.
2. Be sure your lease has an “Out” clause. This should allow you the option to sell your business and/or assign it to another person or entity. The out clause should also allow you to sublease the property if you move or close your business. It is likely that your prospective landlord will insist that exercising these actions will require his written approval. This is normal provided the section of the lease regarding the out clause include language such as “the property owner shall not withhold consent without good cause.” Your attorney will clean up the language.
3. Get a “Quid pro quo” when signing a long-term lease. Commercial landlords want long-term leases with terms from five to ten years. In exchange you should negotiate for things you want. They can be things such as “tenant set-up” expenses (build outs) or a set period of free rent.
4. While your new landlord may tell you that the property is zoned for the business you will be operating make sure before you sign the lease. While your landlord may believe the property zoning allows for your business he can be wrong. This can be easily checked with local government.
5. Never negotiate a lease when you are under duress or stress. Rarely is there an instance where you have to jump in without negotiation. If your business has grown to where you require more space or your lease had terminated unexpectedly, it is best to hire a Virginia attorney experienced in small business law. Negotiating on your own when you are feeling overwhelmed has you at a disadvantage, an attorney evens the playing field.
Law Office of Ryan C. Young, PLLC | Commercial Real Estate & Small Business | Richmond, Virginia