Leasing commercial space is one of the most significant decisions a small business owner can make. Where the commercial real estate market can be competitive, it’s easy to get swept up in the excitement of finding the perfect location. However, before you sign a lease, it’s important to take a step back and watch out for potential red flags that could cause complications down the road. Here are five key things to look for before committing to a commercial lease:

Hidden Fees and Costs

When shopping for commercial space, it’s easy to focus on the base rent. However, it’s essential to dig deeper and understand all the costs that will come with the lease. Be sure to ask about Common Area Maintenance (CAM) fees, utilities, property taxes, insurance, and any other charges that may not be immediately apparent. These can quickly add up and make a seemingly affordable space much more expensive. Before signing, get a full breakdown of all the fees associated with the property, so there are no surprises later.

Unclear Maintenance Responsibilities

Another important consideration is maintenance. Many leases will specify who is responsible for maintaining certain parts of the building. For example, the landlord may handle repairs for common areas, but you could be responsible for fixing issues inside your unit. It’s important to clarify what repairs are covered by the landlord and what you’ll be responsible for as the tenant. This includes things like HVAC systems, plumbing, roofing, and general upkeep of the property. An unclear maintenance agreement can lead to disputes and unexpected costs down the line.

Excessive Lease Length with Limited Renewal Options

When signing a commercial lease, it’s crucial to ensure that the terms give you enough flexibility. A long-term lease may seem like a good deal at first, but it could lock you into a space for years with little room to renegotiate the rent or adapt to changes in your business. Make sure the length of term you agree to is suitable to your business plan. Lease renewal options are also an important tool in the lease agreement negotiations. This will help you better plan for the future of your business.

Lack of Expansion Opportunities

Small businesses often outgrow their original spaces, so it’s essential to consider future expansion needs. When reviewing potential properties, make sure the lease allows for growth. Is there the possibility to rent additional space in the future, or would you need to move completely? If your business grows rapidly and you’re forced to relocate, it can be disruptive and costly. A well-negotiated lease will offer you options to expand within the same building or complex when your business needs more room.

Ambiguous Zoning or Usage Restrictions

Before committing to a commercial lease, you need to make sure the space is zoned correctly for your type of business. Zoning laws can impact whether your business is legally allowed to operate in that location, and they vary from city to city and even from neighborhood to neighborhood. For example, if you're running a restaurant but the space is only zoned for general retail use, you may face challenges getting the necessary permits or face fines. Always verify the zoning status and any other usage restrictions before signing your lease to avoid costly issues down the line.

Leasing commercial space is a significant commitment for any small business, and while finding the right location is exciting, it’s crucial to look beyond the surface. By watching out for these five red flags—hidden costs, unclear maintenance responsibilities, long lease terms, lack of expansion options, and zoning issues—you can protect your business from unnecessary stress and expenses. Take your time, do your research, and ensure that the space you choose will support your business’s growth for years to come.