5 Common Mistakes Retailers Make When Negotiating a Lease

If you have ever negotiated a rental lease, you know how stressful it is. Retail property agents will tell you that a poorly negotiated lease can have serious negative financial implications for your business. We often see businesses fail as a result of a bad rental agreement. At LeaseWise, we have plenty of experience helping our clients navigate and avoid potential lease pitfalls.

Let’s look at the top 5 lease negotiation mistakes we see below:

Mistake 1: Misjudging the Importance of Location

The location of your business is a make-or-break factor. So, before signing any rental lease, you must do your homework. Analysing information such as foot traffic, demographics, available parking space, visibility and competition in the area is of the utmost importance.

Even within a complex, some locations will be better suited to your business and target market than others. Be sure to check the facts before signing the lease.

Mistake 2: Neglecting the Fine Print

A lease agreement is a binding document. As such, it will most likely contain a lot of legalese (the formal and technical language used by lawyers in legal documents). The lease will contain complex concepts and conditions.

It is vital to read and understand every part of the agreement. Factors like lease terms, renewal options and operating restrictions should be studied in detail and examined with your business’s goals and growth projections in mind.

Mistake 3: Being Unaware of Hidden Costs

Be sure to understand all of the cost implications included in the lease agreement. Look for “hidden costs” such as administration fees, property taxes, insurance, maintenance fees and marketing expenses.

Mistake 4: Underestimating Fit-Out and Make Good Obligations

The current condition of the space may not be turnkey, so it is essential to understand who bears the financial burden of the required fit-out and the associated costs.

At the end of the lease, you could be responsible for make-good conditions to restore the property to its original condition. These are all important factors that must be carefully negotiated.

Mistake 5: Not Getting Professional Help

Deciding to work through the negotiation process on your own can be a big mistake, especially for small business owners. Hiring the services of professional retail property agents will save you a great deal of money and headaches in the long run. Often, they will handle the entire negotiation for you and protect your best interests in the process.

Contact LeaseWise today for assistance with your rental lease negotiations. As one of the leading retail property agents in Melbourne, we have all the skills and experience to guide you through the process safely.