10 Dos & Don’ts in Negotiating a Commercial Lease for Startups

Dos:

1. Do identify the strength of your leverage (e.g., well-funded, good investor, low occupancy rate) before starting the negotiation
2. Do clarify the specific conditions the premises should be placed in before having to take on the lease
3. Do define the premises with specificity including having a right to measure
4. Do negotiate amount, manner of payment, and time for return of security deposit
5. Do identify if your use of space violates convents to existing tenants

Donts:

1. Don’t let landlord to demand rent immediately. Negotiate a specific timeline needed for modifications to the premises before you can be operational
2. Don’t allow the landlord to pass through all the expenses
3. Don’t let the landlord to define the use provision narrowly
4. Don’t let the landlord get away if the premises is not in compliance with zoning laws
5. Don’t let the landlord get away if the premises is not placed in the agreed upon condition. You should not have to assume the lease if the premises is not ready nor do you want to have to be without remedy or recourse if the premises is not ready especially if you need a space for operation. You should provide an option to get out of the lease or take over the lease subject to rent deduction