This month’s series of blog posts are focused on preparing for the new year. Last week, we discussed business plans and why they are important. Today, we are going to shift focus and talk about your business’s lease. As the new year approaches, it is a great time to review a document that you may not have looked at for a few years. Depending on your current situation, it may be a good time to negotiate a lower price, ensure that you are paying the right CAM charges, or make sure that you have sent in your renewal notice if it is due.
So when reviewing your lease, what should you be looking for? If you are in a space that you hate or you think you are paying too much for, you may want to look at the lease to see if you can either get out of it or negotiate an early termination. Reasons for early termination may include failure to calculate CAM charges correctly, failure of the landlord to keep the property to minimum standards, and other terms present in your lease. As leases vary greatly, you will have to look at your lease to find out if there is anyway to get out of it specifically. If there is not a way to get out of it and you are struggling financially, you may be able to negotiate lower rent or an early termination for a fee. Again, this varies on many facts so you may be in a situation you cannot get out of.
If you love the space you are in and think that your base rent is about market value or if you are in a situation and cannot negotiate an early termination or reduced rate, you still want to review your CAM and other charges above the base rent if you are responsible for them. In some cases, you may be paying more than you should for things such as water, electricity, insurance, and common area maintenance charges. If you have not had an accounting recently, you should request a written accounting. If you have had an accounting, you will want to review it to make sure you are actually paying what you should. If you are being overcharged, you need to talk to your landlord to rectify the situation.
Lastly, many leases include rights of renewal if you negotiated it when you signed the lease. These rights of renewal many times include specific time frames that you need to comply with to excise your right to renew. If you have a space that you love, one that you put a lot of money into, or one that meets your current needs and you want to stay in, make sure that you know when you need to inform the landlord that you are renewing. If it is in the next few months, you may want to have the renewal notice ready to go. Either way, you want to make sure your calendar is marked with the date you need to send it in so you don’t miss the deadline.
If you have any questions about leases, your rights and obligations under your lease, or any other business needs, please feel free to call me, your Denver small business lawyer, today at 720-258-6647!