Understanding the lease process

Whether a client is looking over a lease in an effort to rent a space from a tenant, or the owner of a space is drafting a lease for a new renter, it is important that the lease accurately portrays all of the information needed for the business transaction. In some cases, renters may not understand exactly what is in the lease agreement and/or the owner may not know what to include in the documentation. If a crucial piece of the lease is left out, it could lead to major legal problems later down the road.

First, the letter of intent should be made available with an accurate description of the rent, description of the space, terms, operating expenses, exclusivity clauses, security deposit, construction, maintenance and repair, parking, signage, repair, subletting and any other special requirements. The renter should then be given time to review the terms of the lease and communicate with their attorney if needed. It is advantageous for both the owner and the renter if both parties fully understand the terms and negotiate any changes if needed. Both parties should go in with realistic expectations of the lease and the negotiations process.

Time should also be given to either party if they need to consult other professionals, such as technical experts, electricians and construction managers. In most cases, a deadline will be given and occupancy will be scheduled for a specific date. Although some landlords may be more lenient on the terms, it is best to stay on schedule.

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