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5 Checkpoints Before You Sign a Commercial Rent Agreement


checkpoints before you sign a commercial rent agreement

1. Rent and increment clause

The first point to carefully examine is how much rent you will pay and the increment clause. It’s advisable to also ask for the security deposit and how much of this amount will be refunded when you vacate the property. Make sure the rent agreement also lists a termination clause specifying the tenure of stay and notice period. Also check if there is a lock-in period clause and the duration is agreed as per the commercial discussions.


2. Fees & charges for facilities


Remember to check the rental agreement for the day by which the rent is expected and the late charges if any. Look out for any additional charges you may have to pay for facilities such as parking, etc. regardless of whether you use them or not. Before inking the deal, ensure that all previous maintenance charges, utility bills and dues have been cleared by former tenants.


3. Scope for negotiation

The deal is not final until it is signed, so go through the rent agreement and check if there is any scope for negotiation. You can make a list of terms you may not be comfortable with and request the landlord to consider changing them. Ensure all the commercial terms and conditions are captured in the agreement as per the negotiations concluded between the parties.


4. Check the property

Ensure that you visit the commercial property a few times before moving in and check it thoroughly. Carefully examine the quality of construction including walls and flooring, paintwork, electrical appliances, water connection and plumbing fixtures and make sure they are in good condition. If you notice any damage, inform the owner and insist on having it repaired before moving in.


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5. Repair and renovation

The rent agreement should clearly state who will pay for the regular maintenance work such as HVAC repair and replacement. Also ask if the owner will pay for repair work in case of any accidental damage to the building, or in the event of any natural calamity. Many offices allow for improvements such as lighting, paint, carpets and new portioning. Ensure that the terms and mode payment for the renovation are clearly stated in the lease agreement.


Commercial lease agreements are complex documents and may be difficult to decode without the help of an expert. It’s advisable to seek help from professional agencies. At Citadel, we offer end-to-end CRE services and can help you draw up the best rental deals and agreements to secure your interests. Get in touch today!


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