What You Should Know Before Signing an Office Lease Contract

By  //  December 4, 2019

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All business owners want their businesses to be successful. In many cases, once a business grows there is a need to lease out an office to continue operations.

All business owners want their businesses to be successful. In many cases, once a business grows there is a need to lease out an office to continue operations.

Aside from maintaining a website, you might need a physical office. Often, signing the lease contract without proper knowledge is the worst mistake one can make for the business. Before you sign that contract, there are several things you have to consider. 

A lease contract is an agreement between the landlord and the tenant. Anything written in that document becomes legally binding. That’s why it is important to read the contract’s fine print. Here are some of the things you should consider before signing that contract:


Your office’s location is crucial if you want to have an edge over your competition. In many cases, being near the action (foot traffic) is the ideal place to set up your office but you always need to factor in the type of industry your business belongs to.

For instance, if your business is a real estate agency it would be best to choose an office in areas where there is a high demand for your services.

However, you have to consider the competition. If the market is pretty saturated, it may or may not make sense to open a shop right next door. 

Additionally, the office location should be highly accessible to you and the members of your team and your target audience as well. Before you agree on the contract, scout the area first, and see whether it will fit all your needs. 


Of course, you have to take into consideration your budget. If you like a high-traffic commercial space, but rental rates are way beyond your budget, you have to think twice about signing that contract!

The best way to do it is to set a budget first, stick with it, and then look for an office space. You wouldn’t want your office rental to take up most of your budget without assurance of return of investment.

You don’t want your business to suffer because of this, particularly if you are loaning your capital. If you must, crunch the numbers and analyze how you should allocate your budget.

You have to think about tons of other things about your rental space other than the rent alone. You still have to think about possible renovations, furnishings, local permits, business insurance, and utilities on top of the rent.

When inquiring, don’t forget to ask about what is included in the rent, such as internet connection, water bills, maintenance, and cleaning. Also, you have to rent the space that you need. 

Lease Length

When leasing an office space, the lease length is an important factor to consider. Would you want to rent it out long-term or short-term?

Generally, long-term leases will get you lower rates, but you also have to consider the possibility that your business might not be able to sustain the lease length, particularly if you’re a startup company with a few backup investors.

For instance, don’t sign a 5-year contract if you’re still uncertain about your business’ future. If your business prospers, you might outgrow the space and may need to move on to a bigger space. When this happens, you have to make sure the lease agreement has provisions for an early exit, including penalties and extra charges. 

Commercial Broker

Renting out an office space can be pretty challenging. There are tons of legal complexities to deal with that people new to it find overwhelming.

Those who don’t want to deal with all these hassles can opt to work with an experienced commercial broker. The Jeff Tabor Group advises business owners to work with a professional who knows the ins and outs of the leasing industry.

This way, they can work out deals that will favor the tenant and not the landlord. They are also most adept at negotiating lease technicalities and even scout the perfect location for your business. 

Starting a business has its rewards, but it also has its difficulties. Lease contracts are just one of the many contracts you have to sign but it should be done with great care and caution.