Negotiating favorable lease terms is critical for any New York business. Whether the leased space is in an office building, a warehouse or a shopping mall, lease payments represent a substantial expense for the business. Making sure the business gets good value and fair treatment in return is the goal of commercial lease negotiation.
Unlike residential leases, which are typically prepared by the landlord and presented to the tenant on a take-it-or-leave it basis, commercial leases are usually the product of negotiation between landlord and tenant. Some provisions of commercial leases are typically negotiable; knowing which provisions these are can be a big advantage.
The monthly rent payment is obviously critical, but a prospective tenant should not focus on that to the exclusion of other issues. Some other key provisions to negotiate are the right to sublease, exclusivity and co-tenant clauses, and termination provisions.
Whether the tenant is responsible for utilities, maintenance, property taxes and insurance varies from lease to lease. In a gross lease ,the tenant makes a fixed monthly rent payment and the landlord is responsible for paying maintenance, insurance, taxes and sometimes utilities. In a net lease, the tenant is responsible for some or all of these other costs.
When negotiating a commercial lease in New York City, it is generally wise to have an experienced real estate attorney on your side. The attorney can review the prospective lease, advise the client as to the significance of the terms, and make recommendations as to what should be negotiated. The lawyer can handle the negotiations on the prospective tenant’s behalf and work to obtain a fair and advantageous deal for the client.