You love to shop … or maybe you don’t. But in either event we have to buy things to survive. In your business you routinely make purchase decisions, large and small. Here’s a business purchase quiz for you: Have you ever negotiated a critical purchase without knowing how much the item costs? Nope. Have you ever bargained with a supplier without seeing the price list? Of course not. Have you ever spent hours and hours ($$) finding a much wanted item and then spent more hours ($$) arranging special delivery and more hours ($$) getting it assembled AND THEN asked how much it costs? No, you say?
But that’s probably how you negotiated your lease, if you negotiated at all. People spend countless hours looking for the location, negotiating with a broker, picking out carpet and paint colors BEFORE they ever see the lease. How can that be? Because business owners (that’s you) think that commercial leases are really all the same. Leases are a commodity right? Wrong … oh, so wrong. Of course you know the base rent and the options to renew. But everything else just seems a blur. No matter. None of that other stuff really matters. Wrong … oh, so wrong.
As we fishermen would say, you’ve swallowed the hook before you see the lease. You’ve already committed an enormous amount of energy and time in finding this space and the broker seems so willing to please. It’s such a good location. There’s just no turning back. Then the lease appears. It always comes last.
Ever notice how the car salesman talks about the shiny red paint and the leather interior and … and … before he talks about price? Sadly, the commercial lease process isn’t much different.
Here’s what you need to know. GET THE LEASE AS SOON AS YOU SEE THE SPACE. The broker will have a lot of reasons why that can’t happen. He/she will tell you that he/she can’t get it for you because so many of the details are still missing. Hogwash. The Landlord has a fill in the blank lease, I assure you. Tell the broker you want the blank lease used by the landlord …. NOW. Assure him/her that you understand that there are blanks, but you would like to see the “boilerplate” stuff anyway.
There are tons of things in that boilerplate that may affect you directly and immediately. Most importantly, that “boilerplate” explains how the landlord passes through its expenses to you. This is the language that makes your eyes glaze over, but I assure you it’s not the inside of the book cover. It’s for real. Get a real estate attorney to explain it to you, BEFORE you pick out the paint and the carpeting. Countless people have told me what a mistake they made in waiting for the lease document, after abandoning that “good deal.” Don’t be one of them.