Step 25: Finalize Location
The Concept:
Once you've secured financing, it's time to secure your business' future home.
What you need to know:
You've picked out a building; now you must finalize the lease or purchase agreement, negotiate whether you'll have renewals of the lease or an option to purchase, and obtain insurance. Again, if you're leasing a location, be sure an attorney or real estate professional reviews the lease. You need to fully understand the type of lease (there are many) as well as its terms so that you're crystal-clear on the liabilities and duties assumed by each party. Attempt to negotiate terms you dislike, such as the length of the lease. If the building needs a coat of paint or more serious improvements, make sure the landlord's responsibility for those are built into the contract.
Points to consider:
Will the landlord permit alterations you need? Must you pay to restore the site to its original condition when you leave?
Are drawings and a written description of the facility attached to the lease?
Are guidelines for lease renewal included in the document?
When is your first payment due? What is your date of possession?
What are the owner's responsibilities for site improvement?
Who pays the taxes, insurance, utilities, and maintenance?
Do I have a cap on rent increases?
What are the terms of escalation?
Is the owner penalized in the case of delayed occupancy?
Have you considered using a buyer’s rep vs. an attorney? Fees are not paid to a buyer’s rep unless you buy a building.
Has my attorney reviewed the lease or purchase agreement? Do I understand all rights and responsibilities regarding this property? |
