Tips: Signing a Lease

Negotiate the Best Lease for Your Business
Before negotiating terms of a lease, make a list of terms that would benefit your business. For example, if you are opening a jewelry

store in a mall, the lease should stipulate that no other, or only one other jewelry store, can open in the mall during the term of your lease. If you are expecting to generate walk-in business, you will need terms that allow you to put up necessary signage.

Sign the Right Lease for Your Needs
A shorter-term lease allows you the flexibility to pack up and leave sooner if you are not pleased with the location. A long-term lease can give you long term stability and keep rent increases down, but may tie you to a location that may not be profitable or one, which your business may outgrow. There are generally ways to break any lease, but it’s not your intent going into such an agreement to seek ways to get out.

Be Wary of Assignment Clauses in Your Lease
Be particularly leery of an assignment clause that says a change in more than 50 percent of the company's stock ownership will be deemed to be an assignment that is prohibited without the landlord's approval. A prohibited assignment can result in the landlord terminating a favorable lease. As the company grows and new people invest in the company, this clause can be inadvertently triggered.