What You Need to Know About Before Signing a Lease for Your Office Space in Parañaque
What do you need to know before signing a lease for your office space in Parañaque?
- Read and understand the contract
- Have a business structure in place
- Know the terms of the lease
If you are looking for an office space to lease in Parañaque or any other city here in Manila, you should probably take the time to learn about the crucial terms of a commercial office lease before you sign and pay large dividends.
Commercial leases are not at all like residential leases because they usually require significant monthly payments and carry long terms. Your financial obligations might also end up increasing since you will have to pay for common area expenses and building maintenance. In addition to this, most leases are usually drafted by the landlord of the building, which means that they reflect the interests of the landlord and not yours.
For these reasons, having a basic knowledge of a few concepts about leasing can greatly improve the terms that you can get. Here are a few things you should know before signing a lease:
Read and Understand the Contract
This shouldn’t really come as a surprise to you, but you really do need to read your lease. And even though it’s a very long and not at all interesting piece of literature, it is important for you to know what it contains.
Check the definitions and key terms and make sure that you understand them well. If you are having trouble understanding anything in the contract, don’t be afraid to ask for a clarification. Take a close look at the terms, particularly your right to cancel.
Many landlords tend to use a standard or “boilerplate” lease that contains general terms for all leases, so if you have negotiated something different, make sure that it is included. Even more importantly, make sure that your special language and the standard language do not contradict each other.
Do not assume that your landlord got everything right on the lease either. Make sure to check your start and end date, rent, rent escalation, and any other special terms that you negotiated for. Always know what you are obligated to do.
Have a Business Structure in Place
Make sure that you have a business structure in place if you want to be protected by it. File your Articles of Organization for an LLC or your Articles of Incorporation for a corporation.
Aside from having this structure in place, make sure that you have the documentation from your board of directors that approves your lease. Once your board has considered and has approved of your lease, you should have something to back it up. There should still be some documentation should your lease be approved even if you don’t have a board of directors.
Know the Terms of the Lease
Most leases use the term ‘CAM’ which stands for “Common Area Maintenance”. This means that you should be allocated a percentage of the CAM that you are responsible for based on the percentage of the building you are renting.
With that in mind, make sure that the percentage is always based on the size of the building. In addition, this percentage should not vary depending on how much of the building is rented.
There are a lot of things you need to consider when you are looking for an office space for lease in Parañaque and other similar areas for the first time. The entire process can be extremely complicated and there are also many factors that can impact your final decision.
As a future tenant, you have to consider the duration and terms of the lease as well as the cost vs. location. But perhaps most importantly, your office space for lease should provide you with the option to expand and grow your business.