Lease document

The lease document that lays out the expectations for both you and your landlord.

• There are some standard elements that will be included in your lease.
• There are also parts you can negotiate before you sign to get more favorable terms for your business.

Before you sign a lease

• Contact the Zoning department to make sure your business is allowed to operate in the location you are considering.
• Negotiate terms with your landlord and provide your landlord with a Letter of Intent (LOI)
• Consider having a professional review the lease
• Make sure you review the lease carefully before signing to make sure it reflects what you discussed with the landlord.

Related links

• Planning and Zoning Department
• Terms to negotiate
• Letter of Intent
• Professionals who can help

Terms to negotiate

Basic details

• Length of lease
• Price per square foot of space
• Options to sublet the space, transfer the lease to a new business owner, or terminate the lease
• Amount rent can increase each year
• Who pays the property taxes
• What happens if your landlord decides to sell the property, or a neighboring anchor tenant leaves

Tenant improvement costs and permits (TIS)

• Who will pay for renovations that need to be completed before you move in?
• Who will be responsible for obtaining the necessary permits and inspections from the City

Other costs

• Property, fire and flood insurance
• Utilities
• Mainteinnce and repairs to keep the building up to code

Timing

You may experience delays that are out of your control related to things like:

• Completing renovations
• Getting licenses and permits

You can negotiate things like:

• Having the space rent-free for the first two or three months rent-free
• Making the lease contingent on obtaining all the necessary licenses and permits

Letter of Intent (LOI)

An LOI can be drafted either by your or your potential landlord.

• It may not be legally-binding.
• It outlines basic terms and demonstrates preliminary commitment.

How to write a Letter of Intent

Professionals who can help

It's a good idea to talk to a professional or experienced mentor who can help you think about all the important details.

Business technical assistance consultants

Small business consultants through BTAP

Co-op consultants through CTAP

Commercial brokers

Commercial brokers work on commission which means they represent you in the negotiations.

• They help negotiate the lease terms.
• They are not allowed to give legal advice, and a lease is a legal contract.
• They only get paid if and when a lease is signed.

If you use a broker:

• Use someone who is not representing the landlord.
• Avoid using a residential real estate agent to negotiate a commercial lease for you. T

The Minnesota Commercial Association of Real Estate (MNCAR) is the professional association of commercial real estate brokers in Minnesota.

Visit MNCAR

Real estate lawyers

Retail leases are detailed, complex legal documents. Real estate lawyers can:

• Help with lease review, interpretation, and negotiation.
• Understand and explain legal jargon.
• Protect your interest by negotiating lease clauses that could be harmful to you.