As any entrepreneur will tell you, starting and growing a business isn't for the faint of heart. Add a difficult landlord to the equation and an entrepreneur's dream can quickly turn into a costly, time-consuming nightmare.
Ignored repairs, neglected common areas and unexpected fees are enough to create a headache for any tenant, but they're especially devastating for small business owners, diverting their attention from what matters most: the growth of their company.
Whether you're an established business or fledgling startup, here are five steps you can take to avoid -- or resolve -- disputes with your landlord:
1. Work with an experienced broker: Finding space on your own may be tempting, but it could end up costing you in the long run. An experienced office broker can not only give you a better sense of how much space your company needs to lease, but can also tell you more about the properties on your short list and, more importantly, the people who own and manage them. Because tenant reps are compensated by the landlord, their services are free to you as the tenant. If a problem arises with your landlord, your broker can act as your first line of defense, allowing you to focus on the day-to-day operations of your business.
2. Read the fine print: Before signing on the dotted line, make sure you've carefully reviewed the terms of your lease to prevent your landlord from throwing you a curve ball down the road. Is the rent the correct amount? Are there escalations and, if so, how are they calculated? Are real estate taxes, insurance and maintenance costs included or separate? You'll also want to make sure the lease specifies which space you are leasing; whether improvements are being made and, if so, who's paying for them; conditions for the return of your security deposit; penalties for early termination; and whether you're allowed to sublease your space or assign the lease to another tenant, which could be your "out" if you run into issues with your landlord. If your business requires signage, or if you're worried about a competitor leasing space in the same building, you'll want to make sure that's spelled out as well.
3. Do your research Most business owners have an extensive professional network they can tap to vet potential landlords, so be sure to take advantage of yours. Asking for recommendations from your peers is a great way to narrow the field. Additionally, in an age where almost everything is online, don't forget to look for reviews of landlords/property management companies to see if there have been any recent complaints.
4. Break tradition As companies move away from the traditional office model, some are turning to shared office environments that offer shorter term contracts. These facilities make it easy for business owners to grow or shrink their space as needed or, alternatively, leave if they're unhappy with their office provider.
5. Know your rights If you find yourself at an impasse with your landlord, make sure you've exhausted all options before accepting defeat. The same lease that prevents you from leaving holds your landlord accountable to certain terms and conditions that, if violated, may allow you to break the lease without incurring a penalty. If you're unsure of your rights or whether a breach of lease has occurred, consult a real estate attorney. Many offer free consultations that will tell you if you have a case.
Moving to a new office can be an exciting -- and stressful -- time for any business, but doing your homework and finding a tenant rep who can analyze your needs and steer you toward the best options in the marketplace can prevent you from making a move you end up regretting.
Frank Chalupa is president and co-founder of Amata Office Centers, Chicago's largest privately owned office suites provider. Founded in 2002, Amata offers an array of full- and part-time office solutions to businesses of all sizes. For more information, visit www.amataoffices.com.
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