Tips For Renting Commercial Premises
Renting commercial premises for opening a business involves a number of points to consider in order to prevent both the lease or rental payment as well as the requisite procedures (paperwork, formalities) possibly affecting your earnings.
The decision whether to lease or purchase a commercial space definitely depends on your financial capacity, because while ideally purchasing the property would be best, economic conditions do not always allow for such. Therefore, you should assess your financial situation, and how much you can invest, since sometimes it is more advisable or advantageous to pay monthly than to cover the rental (or lease) for the appurtenance (in this case, the retail unit).
Alejandro Kuri, director of A.K.A. Administraciones, advises that before deciding to open a business, entrepreneurs should have certain aspects perfectly clear, such as the rent for the premises and what procedures (formalities, paperwork, etc.) should be completed with the appropriate authorities, thus avoiding many headaches. For this, the professional pointed out the following tips:
What you should know before renting commercial premises
- When renting commercial premises, a (warehouse) facility or any real property, there is a transaction performed that should be backed by a Lease Agreement to be drawn up between the both parties.
- Lease/Rental Agreements for use other than housing have freedom of contract and are governed by the terms agreed upon between lessor (landlord) and lessee (tenant).
- For those causes not covered in the Agreement, always turn to the Civil Code. However, covenants (agreements, terms or understandings) contrary to law can always be formalized (executed), but need to be fully set forth in the Agreement to be signed by both parties.
- The written Lease Agreement must identify the parties, the location and description of the premises, the term (period of time), rent to pay, amount of deposit and all the clauses the parties so stipulate.
- The term of the Agreement is governed by the volition of the parties. If nothing is stipulated, then by law its term is one year.
- The amount to be held as a deposit is also negotiable, although the equivalent to two months’ rent is commonly considered for the deposit.
- The rent or amount to pay for the lease is freely covenanted, as well as the form of payment and the address where such payment is to be effected. The law provides that such be paid a month in advance, within the first seven days of the month, without being able to demand more than one-month advance payment. The lessor (landlord) is obliged to provide a receipt for payments received.
- The Agreement should also contain important clauses such as liability for work done for repairs and improvement, the grounds for terminating the Agreement, and the channels for effecting any type of claim for breach of contract on the part of any party.
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