When you decide to take access to a property or equipment through lease, it should be a decision made through thorough analysis and planning. Or else, you will find yourself in a compromised position.
Leasing a property or equipment can help you quickly achieve demand for a space for your business without breaking the bank. However, as life-saving and vital as this could be, it is crucial to understand the details of the lease contract you are about to sign.
Will A Lease Benefit You or Your Business?
Whether you are just starting or expanding your business, plying the route of leasing the property where your business is situated is a great idea. Aside from managing risk that could arise from outrightly owning the property, you also save quite a large amount of funds that could fund other parts of your business.
When appropriately planned out, a lease will help you build yourself or your business to become stronger. However, not understanding the terms and other factors surrounding the lease agreement can be detrimental to your business.
Here, I have listed some tips you should consider before signing a lease agreement.
Understand The Terms Of the Agreement
Just like any contract or agreement, there are terms that bind all parties and stakeholders in the deal. Lease terms such as parties involved in the contract; address of the property, monetary commitment, due date, and other vital clauses of the lease contract must be understood.
After understanding the contract terms, it is also pertinent that you are comfortable with the terms of the contract as it relates to you. It is cogent as it could impact you directly if there are hidden clauses that are not favorable to you or your business.
You can go through this contract multiple times and simulate the terms in reality to confirm it is perfect for you and your business.
Take Your Time
Properties abound for you to choose from. Abruptly rushing into the decision-making phase of taking that particular property might be a bad idea.
Explore all options available to you in the market. Check out different properties objectively as it concerns your goals for finding the property in the first instance.
You can also take it a step further by getting lease contracts for these properties and run an adequate analysis to ascertain the best one for you.
Once you have the best property (location and contract-wise), the next step is to begin the next phase – negotiation.
Negotiation is Key
So you have found that perfect property whose contract (according to you) is fair? It is time to go into the murky mud of the whole process.
Negotiation is one prowess that would help you get the best property for the best terms. Other parties to this deal will also bring their best foot forward by convincing you that their contract offering is the best in the market.
You need to have clarity about what is obtainable in the market for such property and be willing to have the conversation around beating the terms in ways that are great for you and fair to all parties involved.
Regardless of their cajoling skills, be sure that the deal is the best for you after rounds of negotiations.
Get Exclusivity Right and ‘First Right Of Refusal’
While negotiating the terms of the contract, two important clauses that would undoubtedly work to your advantage in the long run are the exclusivity right & first right of refusal.
Exclusivity implies that nobody can render the same service as you especially in the case of a building. This clause is perfect for business owners not leasing an entire property. The clause means that you are the only person who has the right to sell your service on the property.
The first right of refusal implies that when the property you are leasing is about to be sold, the owner has to tell you about it and can only sell it if you refuse to buy it. It is a solid clause as it not only shields you from waking up one day to the news that you have a new landlord, but it also means that you can outrightly own the property when it is up for sale.
Get these two clauses boldly written in the contract.
Do not accept a verbal agreement on them.
Do Not Sign Without Your Lawyer
While everything is looking great now, do not fall for it.
Your signature on any contract, especially a lease, is binding. It means that you agree with all the terms, clauses, subtle clauses, and the rest once you sign. It is strictly advised not to sign a lease agreement without your lawyer.
Engaging the services of a legal practitioner will help protect you and your business in the long run. The lawyer must be someone you trust, and there is no conflict of interest.
This is one very vital tip. If anything, it should be the priority for you when setting out to get this property.
When you are trying to grow your business or start one, leasing the properties or equipment might be that simple action you require to get a boost. And even if it is not for your business, you probably need to tick all these boxes while leasing for personal use.
Do not forget that as important as getting the best property or equipment, negotiating your way into having the best lease agreement is vital. The presence of your lawyer before appending your signature on the lease agreement is also crucial.
Check out lease package and find the best lease option that suits your business.