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Do you understand your commercial lease?

For many businesses, one of the most essential parts of their business that they may overlook or underestimate the importance of is their commercial lease. Most businesses prefer to lease property, especially if yours is a new or start-up business.

You simply cannot commit the capital necessary to purchase property and the risks are great. In a new business, you may not be certain of how much space you need and whether your location will actually work out. A lease is the ideal solution, presuming you obtain the correct one.

There are multiple types of commercial leases, which can range from those where the tenant pays the rent, utilities and their proportional property tax to those where the tenant covers many more costs, including some structural repairs, other common maintenance, insurance and tax.

They may be described by such terms as a net-net lease, a full service gross lease or modified gross lease. What is important to remember when signing a lease is that it is a legal contract and you and your business will be bound by the terms of that contract.

It is essential that you fully understand every element of that contract, as any issues or disputes between you and your landlord or other tenants are likely to be governed by that document. If something goes wrong, you want to know in advance, who is responsible.

Having your own commercial real estate attorney review such a lease prior to your signing any documents is always a good idea, as they can both explain every aspect of the lease and recommend changes or modifications based on their understanding of your businesses needs.

This can prevent costly legal disputes from developing, should you need to obtain modifications to your lease or with the premises. Because with a commercial lease, what you do not know can hurt you and your business.

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