Key Questions

This section discusses key questions to ask your potential landlord when reviewing a space and draft lease. Ensure that the landlord’s answers to your questions are consistent with what is written in the lease. Consider asking your attorney or real estate agent to assist you in negotiations.

• Allowed uses. If the landlord doesn’t want sound to disturb other tenants, and you are a pianist, consider whether the space is appropriate for your use. Likewise, if you are considering living in the space and the landlord specifies no residential use, keep on looking.
• Who is obligated to maintain the premises and repair any damage? If you are responsible, an inspection may be warranted, especially for a considerably long or expensive lease. You don't want to be responsible for any damage caused prior to your tenancy.
• Financial questions to ask:
  • What is the rent?
  • Is this a gross or net figure?
  • Who is responsible for property taxes, utilities and other charges? If it is the tenant, what are the additional charges above and beyond the rent?
  • If this is a net lease, what are the property taxes in the area?
  • What portion of the common areas are you paying for, and what activities are allowed/prohibited?
    
• During which hours will utilities and services be provided? Many commercial leases specify that electricity, heat, water and elevator service will be provided during business hours only. You may need these services 24 hours a day, seven days a week. Make sure if you are working during these “off” hours that needed services are available.
• For how many years is the landlord willing to rent the premises? Usually, the longer the lease, the greater your stability. In addition, longer leases may provide you with more leverage in negotiations.
• What will rent increases in each year of the lease be? Will there also be increases in the additional charges (CAM, property taxes, insurance, etc.)?
• How will additional charges (CAM, property taxes, insurance, etc.) be divided between tenants?
• Will the landlord grant the option to renew when the term expires? This option is advantageous and should be included in the lease. If possible, negotiate a price cap on the renewal lease’s rent -- for example, the rent does not increase more than 10% if you renew by a specific date.
• Are you allowed to sublet or assign the lease to another party?
  
  • If you sublet your space to another party, you are still responsible to the landlord for rent and all other charges should your tenant leave without paying.
  • In an assignment, you transfer your rights and obligations under the lease to a new tenant and are released from these responsibilities – legally and financially. The lease should give you the right to do either of the above, and deny the landlord the arbitrary power to withhold consent for a replacement tenant.
    
• What other options are open to you should you need to terminate the lease and are not interested in subleasing or assigning the space? You might want to include a clause that stipulates that, with a certain number of days' notice and possibly a termination payment, you will be allowed to end the lease. Make sure any agreement you make is clearly described in the lease.
• If you are leasing the space as a business or nonprofit, does the landlord expect you to guarantee the lease personally? If you co-sign individually for the lease, you become personally and financially responsible for it if the business or organization doesn’t fulfill its obligations. Although this can be risky, this practice is not uncommon, especially for start-up businesses and new nonprofits.

TIP: Always negotiate the rent. The landlord expects you to, and not doing so could result in you paying more for the space than necessary.