With most contract negotiations, the devil is in the details. The failure to read the fine print will have disastrous consequences. This is true with businesses, as well. It’s the hidden costs that can kill you.
It does not matter whether you are looking for an office space for lease Los Angeles, London or China, do not simply sign the contract once you see a very cheap rate. Remember, the devil is in the details.
It’s essential to consider the hidden costs so you will be prepared once they kick in. These hidden costs are exact of any property so it shouldn’t deter you from renting an office space. It just means that you need to do your due diligence to minimize their effects.
Here are just some of the examples:
1. Maintenance expenses
Typically, you will know who will shoulder the maintenance expenses by the type of lease you agree with the landlord. For instance, full service or double rental will mean that the landlord will pay for the maintenance. A single contract says it’s you who will spend to maintain the property. Make sure to clarify this with your landlord at the outset.
2. Rentable area
Be sure to talk with your commercial real estate agent on the total rentable area of the office space for lease, Los Angeles. With some arrangements, you are not only renting for the entire square foot contained in your office space, but you are also paying for the square footage of the lobby, elevator, stairs, and the like. This will impact on the type of improvements you can introduce in your office space. If you add cubicles, columns, and partitions, they might be factored into your monthly rent, as well.
3. Rent increases
An office space may initially be cheap but be sure to read the terms and conditions regarding the rent hike. Typically, landlords are allowed to increase the rent yearly based on the Consumer Price Index and inflation. The figure is somewhere between 3 and 8 per cent. However, there’s no cap on commercial real estate properties. This means that you should negotiate that the rent increases be outlined in your contract before signing it.
4. Property taxes
Who pays for the property taxes will depend on the lease agreement you signed with the lessor. If it’s a full-service lease or a double net lease, it’s the landlord that will assume the cost initially. However, the price will be passed on to the tenant on top of the monthly rent.
5. Operating expenses
Some lessors will try to pass on their operating expenses — advertising, refurbishing, maintenance, etc. — to the tenant. Make sure to ask for the request for a proposal from your landlord, which will outline how much of the operating expenses will be passed on to you.
The hidden costs should not scare you away. But when trying to lease an office space, it pays to be vigilant. It’s also advisable to have an attorney specializing in commercial law by your side.
Now, if you are looking for an office space but you have no idea where to start, go to a site that works like a matchmaking website. You input your list of requirements for the office space, and the will match you with the right agent who can help. In Los Angeles, we use Office Finder
About the Author
Kevin Adams is a blogger and content writer who help businesses to efficiently operate.