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Six questions to ask before leasing an office space

3 September, 2019

Signing up to a commercial office lease can be major decision for any organisation to make, and asking the landlord the appropriate questions can help to ensure that your property and lease agreements are suitable for your business needs. Here are six important questions you should be asking before signing a lease for office space:

What lease terms are available?

Many commercial leasing agents will automatically put you on the longest lease, even when shorter terms may be available. Make sure you ask about alternative leasing options when looking for commercial office space.

When your lease ends, unless it states otherwise, your landlord has no obligation to offer you the same office space or rental price. If you want to stay on at the end of your lease, you may find yourself facing a steep hike in rent to match market rates. Check whether a renewal option is included in the commercial lease and if not, consider negotiating one before you sign.

What’s included in the rent price?

Make sure you are aware of what the rental price includes. For example: traditionally office leases included utilities costs, however this isn’t necessarily the case when renting office space today. It is important to understand exactly what you’re paying for and what the monthly rental price includes. Are there any hidden fees that you’ll have to pay each month that isn’t built-in to the office lease cost? Ensure you take into account any hidden costs in your budget before signing the lease.

Will the rent increase over the term of the lease?

What could be an attractive deal now may seem less appealing if your rental price suddenly increases. Many landlords now include escalation clauses in their leases which set how and when rent could increase. This could include graduated steps over the life of a commercial lease (either based on agreed percentage increase or indexed to CPI). Another possible source of rent increase is the passing on of hikes in property taxes or utilities.

Who is responsible for upgrades, maintenance and repairs to the office space?

This is usually covered in your office lease agreement, but never assume when it comes to costs and fees associated with leasing commercial property. Make sure you know the detail of what is and isn’t covered, including asking about any repairs that need to be made to the office space before you move in and even after you’re moved in. It is always advisable to get a surveyor to prepare a schedule of condition to record the state of the property at the time the lease is signed as evidence.

What is the floor plan of the space?

Make sure you obtain a copy of the office space floor plan early on in your negotiations, and carefully consider if it will match your business needs. Two office spaces may have the same square footage on paper, but the layout can drastically impact how much of that space is actually usable.

What services and facilities are available?

Depending on the type of commercial building, you might have access to services such as 24/7 security and reception, or telephone, internet, and guest WiFi. There could also be shared amenities and spaces, like boardrooms and canteen areas. Depending on the services and amenities included, they may outweigh the cost of lower cost office space.

What parking facilities are available and how much does it cost for tenants? What about parking for your clients and visitors? This can be an important factor when leasing office space, especially companies located in the city centre. If there is a cost for parking, does it align with your ideal budget for your new workspace?

Has your property lease ended? Are you looking for new office space?

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