Best Practices for South Jersey Small Businesses Signing a Lease

Signing a commercial lease is a significant step for any small business. It's not just paperwork, it's a commitment that can significantly impact your bottom line. It is also an opportunity to think about where your business is today, and where you plan to be in 2, 3, 5 or even 10 years.

Before you sign on that dotted line, here are essential best practices to protect your business:

1. Understand Your Lease Terms. Leases are notoriously complicated. Ensure you fully understand all terms, including rent, renewal options, responsibilities for maintenance, utilities, and property taxes. This really is where a lawyer, who has looked at hundreds of leases, earns their keep.

2. Negotiate Everything. Many small businesses underestimate their bargaining power. You can and should negotiate rent, lease duration, improvements to the space, and even early termination clauses. They need you more than you need them (usually)!

3. Inspect and Document Thoroughly. Perform a detailed walkthrough of the space before signing. Document the condition of the property, noting existing damages or issues, to avoid disputes later.

4. Clarify Maintenance Responsibilities. Don't get stuck paying for unexpected repairs. Clearly define in the lease what maintenance and repairs are your responsibility versus the landlord's. For example, when the roof leaks, who repairs the pipe? The ceiling tile? The rug? Getting clarity before the event is crucial.

5. Understand Rent Increases. Rent escalation clauses can significantly affect your future costs. Ensure you understand how and when your rent will increase, and try negotiating limits on these increases.

6. Plan Your Exit Strategy. Businesses evolve. Negotiate lease terms that allow flexibility if you need to expand, downsize, or relocate. If possible, have permission up front to sublease the space if you need to move out quickly.

7. Is there enough parking? This may seem trivial, but it is the first question I ask every client. It may be enough for your employees and customers today, but in 3 years, will it still be enough? You’d be amazed how often parking is at the center of a landlord-tenant dispute.

Remember, a lease isn't just about your current situation—it's about positioning your business successfully for the future. After all, signing a lease shouldn't feel like buying a used car; if you're worried you might be getting taken for a ride, it's time to step back and reassess.