When all parties sign the letter of intent, you’re ready to start negotiating the lease. Sometimes you’ll just go straight to the lease without signing a letter of intent. The most important thing to remember is that time is your best friend. What’s an extra month when you’re signing a ten-year lease? The longer you have to negotiate, the better your lease will be.
There are a few things you should do before you sign the lease. Hopefully you’ve already engaged your attorney in the negotiations. Don’t give a copy of the lease to the attorney to review at the last moment. You’ve lost a lot of your bargaining power by that point. It’s also a good idea to have your insurance agent read the whole lease and make sure that you have the right policies in place. You should consider investigating the landlord. You can ask for references and talk to other tenants. A good lease with a bad landlord doesn’t make a good combination. You might consider getting a title report to make sure that your intended use doesn’t violate any land use restrictions. You might want to make a list of contractors for landord approval.
Now we’re finally ready to start talking about the actual lease. Everything we’ve talked about so far helps assure that you’ll get a good lease. It will help you make good decisions when you’re negotiating the actual provisions of the lease.
When we talk about your lease, we’re talking about your future. All a lease can do is cover items that typically happen in a landlord/tenant relationship and the things that are less likely to happen, but are better handled in a lease rather than when the event happens. The lease is also a valuable tool to establish expectations among all the parties. That’s why it’s a good idea to spend a couple of hours with all parties before signing the lease to go over each provision.
Once you sign your lease, you’re bound by its terms. We’ll look at a typical life of a lease, the parties, money, fairness, and changes—all to help you better understand the terms of a typical lease.