Reading Your Business Lease - Filipino Journal

Reading Your Business Lease

Reading Your Business Lease

Reading Your Business Lease

If you are starting or expanding a business, one of the issues you will have to deal with is the location. In many cases, business proprietors like you will rent or lease space from a landlord. Before signing a lease, you should ensure that you know the stipulations of what you are signing. Some of these are the following.

Are there other charges aside the rent?
Many people commit mistakes by looking at the base rent and assuming that it is the total amount of what they have to pay. In many leases there are additional charges, so be keen with these. Other charges that you have to pay include taxes, maintenance fees, and insurance premiums. You should also take note if there is the so-called escalator clause, which stipulates that you would increase your lease payment.

What are the terms of the lease?
Almost all leases are for a set period of time. The advantage of a long lease is that you will be guaranteed the space for a long time. If the location of your business is important to you, a long lease may be useful.
On the other side, a long lease obligates you to pay the landlord for the duration of the term even if your business fails. As a result, you should carefully consider the term of the lease.

Are there other significant obligations in the lease?
Many leases contain “covenants.” Covenants obligate you to do certain things and also give you certain rights. The same applies to the landlord’s part, so you should carefully review both your covenants and your landlord’s to ensure you know what you are getting into.

This article is prepared for general information purposes only and is intended to provide comments for readers and friends of Filipino Journal. The contents should not be viewed as legal advice or opinion. If you have specific questions concerning immigration law, you should discuss them with a legal advisor of your choice.

Reis Pagtakhan is a lawyer with the law firm of Aikins, MacAulay & Thorvaldson LLP. He practices in the areas of immigration law and corporate and commercial law. His direct line is 957-4640. If you like to know more about Pagtakhan or Aikins, you may visit the firm’s Web site: www.aikins.com.