Safeguarding Your Family Business
Embarking on a commercial lease for your family business can be an exciting yet nerve- wracking endeavor. It’s crucial to approach this process with a keen awareness of the potential pitfalls that could jeopardize not only your business but also your personal life. In this discussion, we will explore key considerations for family business owners entering into commercial leases, offering insights on negotiation strategies and essential precautions. When entering into a commercial lease, family business owners must recognize the negotiation power they hold. A critical element of the lease is the personal guarantee, which exposes individual assets to legal actions if rent obligations are not met. To protect yourself, negotiate the terms A GUIDE TO NAVIGATING COMMERCIAL LEASES
of the personal guarantee. Aim to eliminate it entirely or, more feasibly, structure it to diminish over time based on your business’s consistent rent payments. Moreover, there are various other negotiable aspects of a commercial lease. Seek options to extend the lease, allowing you greater control over the property’s fate in the future. Tenant improvements and free rent incentives are also negotiable points that can enhance the overall value of the lease agreement. Partnering with a dedicated commercial real estate agent is paramount when searching for a property to house your family business. Unlike the landlord’s agent, who primarily represents the property owner’s interests,
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