In business, you will likely deal with one or more different types of property agreements. You may lease space for your business. You may buy space for your business. In any case, it can be critically important that you both make sure that the necessary terms are included in the property agreement and that the terms of the property agreement fall in line with your business goals. Here, we will go into more details about what you should be on the lookout for in a property agreement.
What to Look for in a Property Agreement
While it may seem like a rather basic thing, it is very important to check the parties and the property listed in the agreement. You will want to make sure that the names in the agreement, as well as the property address, are correctly listed. For instance, you will want to make sure that your business name is listed in the agreement as opposed to you personally.
Another important term on the property agreement, a lease agreement, in particular, is the term or length of the agreement. This is the length of time you will be legally permitted to occupy the property. It is also the length of time that you will be legally obligated to pay rent. Check the term of the agreement as well as whether you will have the option to renew at the end of the agreement term. If you have the option to renew, you will also likely want details as to any additional costs or rent increases you stand to incur.
The rent amount, if you are leasing the property or the cost of the property if you are purchasing, should also be clearly stated in the agreement. For a lease, it should not just say how much rent is, but also when it is due. You should also check the agreement to see if there are any penalties associated with late payment. Most leases will allow a small grace period for late payment and then the later payor will be subjected to a late fee.
The agreement should also state whether or not you will be required to pay a security deposit, most do. The security deposit will be held by the landlord and, should you cause any damage to the property, the security deposit will go towards covering the costs associated with the damage. Also, if you are entering into a lease agreement, you will want to investigate the property agreement for other rights and responsibilities you may be signing on for. Will you be responsible for paying utilities and other services? Are you responsible for any property maintenance? Do you have the right to make alterations or renovations to the property?
If you are purchasing property for your business, you will also want to check out the price and other terms outlined in the agreement. The closing date and costs should be clearly stated as should real estate taxes and special assessments. You will also want to be sure as to what is actually included in the purchase. Will light fixtures, windows, window treatment, bathroom fixtures, and other things on the property remain?
Business Law Attorney
Property agreement terms can have significant impacts on your business. You want to make sure that you are entering into an agreement that is fair and protects your business interests. The Kumar Law Firm can draft and review your business property agreements to help ensure that your interests are protected. Contact us today.