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Commercial lease terms are negotiable

It is common for California business owners to negotiate with property owners regarding the terms of their commercial leases. This practice is an expected one, and property owners are prepared to engage in negotiations in order to secure good tenants. The possibility of negotiation is likelier when the property is not in a prime location or when the market is weaker.

Business owners may be able to negotiate the term of the lease. If the location is a great one for the company, a willingness to negotiate a longer lease term may help the landlord to be more willing to negotiate some of the other terms. Landlords may be flexible with the monthly cost that will be charged for the space. This is calculated by taking the cost per square foot and then dividing it by 12 to arrive at a monthly amount. Owners may be able to secure an agreement for the landlord to charge a lower cost per square foot before the amount is calculated.

Most commercial property owners impose an annual percentage increase to the rental amount. It may be possible to negotiate a grace period for an increase at the outset, followed by a capped percentage amount for successive years.

Business owners may want to ask for help from their attorneys with negotiating the terms of their leases. An attorney may be better able to understand the legal terminology that is contained in most commercial leases. Counsel may then work to try to secure more favorable lease terms in order to benefit the client. When lease disputes arise, an attorney can attempt to resolve the issue through negotiations.

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