Jeff Grandfield

Knowledge is power, they say, and it's as true in commercial lease negotiation as anywhere else. Landlords deal with leases all day long — they have the knowledge. Many tenants are unskilled in what and how to negotiate leases and may be uninformed about the details of their lease, even if it's a renewal. This lack of knowledge can come back to haunt them in numerous ways.

Many tenants have preconceived notions regarding a lease renewal or how they typically work, and quite often these ideas are inaccurate or completely wrong. Some commons misconceptions include: Exercising the option: Tenants often assume that you must exercise the renewal option in order to renew the lease. You absolutely do not have to exercise your option to renew, and in many cases you don't want to exercise your option because it limits what you can negotiate on for your renewal term.

Just as it's important to include certain key terms in your lease, you must also be cautious about what terms are in the lease to begin with and how they may affect you. You may want to remove or adjust some of the following items: Holdover: This provision indicates how much the landlord can increase your rent should you stay past any expiration date of your lease.

If you're thinking of starting your own business, or if you're getting ready to change locations for your current business, you're probably anxious to get out the door and start looking at some properties. But rushing into a new location is one of the worst things you can do. You might get incredibly lucky and end up in the right place with the right lease terms — but you're more likely to land in an unsuitable location or sign a lease whose terms will make you miserable for the next five years.

When you're negotiating your commercial lease, there are a few things that should absolutely be in there. Including all of the following items in your lease is strongly recommended: Corporate entity: If you've formed a separate corporation for your business, it is critical that this entity be identified as the "tenant" in all documents.