Retail Lease Negotiation Tactics

If you are in the market for a new retail location, you want to know how to get the best deal possible before signing your lease. 


We’ve pulled together the top five retail lease negotiating tactics to ensure you’re getting favorable terms. A contract is legally binding, so you want to be sure that you don’t end up in a bad deal. 


Never sign a retail lease without reading through the entire document first. The contract will be more favorable towards the landlord than the tenant. And don’t be afraid to negotiate for fairer stipulations if you feel you’re getting cheated.

Consider the Length of the Contract

One way many landlords set up a retail lease agreement is for a specific length of time. They usually prefer long term contracts, but depending on your business, this might not be a good idea.


Most small businesses only sign a deal for one to two years. If your company fails, you don’t want to be stuck paying for a retail location. But be sure you have the option for renewal.


However, setting up a business that will rely heavily on location, such as a restaurant, you may want to opt-in for a longer-term from the start. 

Termination Clause

Another crucial area to pay close attention to is the termination clause. You will want to know the terms of early termination, meaning canceling your lease before your time is up. 


You will usually face fines for breaking a contract. See if you can negotiate for low or zero fees if you cancel with a 30-day notice. 


You also want to know the terms of default, which means what happens if you fail to pay. See about negotiating for favorable conditions, such as thirty days to pay.  

Research the Area

Another common pitfall new tenants make is to overpay for their rent. Before signing a contract, do your homework and figure out the rental rates for other locations.  


If you are considering a lease with a big property management company, you may request reports from them regarding their properties. This would let you compare the property values. 


Most companies will use commercial property management software to keep track of their rental properties. These tools make it easy to manage multiple properties, including accepting and keeping track of payments, tenants’ information, and leases. 

Pay Attention to the Breakdown of Costs

Many landlords will try to get over on their tenants by hiding additional costs within all the technical jargon, such as for upkeep and maintenance. 


If you sign a net lease, you will be responsible for any costs of upkeep and your rent. A gross lease has all expenses factored in, so you only pay one price. 


You also want to check for how the landlord lists rent increases. Many will raise the costs by month, leading to surprising fees you might not be able to afford six months into your contract.

Payment Records

One of the most challenging parts of renting a property is that it’s your word against the landlord’s, and if you don’t have everything in writing, the landlord typically wins.


To keep yourself protected, look for landlords who use commercial property management software to keep track of their properties.


Property management software makes it easier for both the tenant and the landlord to keep track of payments, costs, and lease. 


Using commercial property management software means you never have to worry about a landlord claiming you missed a payment. It also helps you keep track of all your expected costs.

In Closing

Shopping for a new retail spot can be both exciting and frustrating. No matter how persistent the landlord, you should never sign a contract without reading all of the fine print. Ask questions on things you don’t understand or that aren’t mentioned in writing. If you and your landlord agree to terms not listed, be sure to have them added, so there’s no issue later.