Don’t Surrender Before You Move In

It may be somewhat of a cliché, but you need to consider the end before the beginning. Before you sign on to a new commercial lease, you should establish a viable exit strategy.

Office space undergoes significant wear and tear, especially for long-term leases. Tenants need not commit to giving back their office space in the same condition they entered it. Avoid clauses requiring return in “good” condition, without considering any natural depreciation over the years. As such, we recommend you obtain a clause in your lease that does not require you to restore the premises to its original condition. Landlords will often agree to this but sometimes will require a tenant to remove “specialty” items that were installed by a tenant, such as an oven fume-hood, large supplemental air-conditioning units and/or    

A new contingency is also becoming prevalent: a request to remove all cabling and IT infrastructure prior to vacating the premises. If a previous tenant left cabling behind, you could end up paying to clean up their mess.

Finally, commercial tenants should be aware of clauses requiring them to pay a significant penalty, up to 200 percent of their last month’s rent,  should they remain beyond the expiration date of their lease. This is known as a holdover clause, which can be negotiated to include a gradual penalty over time rather than a large amount starting on the first day of a holdover.

Planning your strategy before occupying the premises allows you to save time and money when departing your space