Sign Carefully
Signing a lease can be very stressful. While the terms may seem fine now, there is always the possibility that you glossed over a clause or didn't fully realize what a term meant. Obviously, you should consult a lawyer before signing the document. However, here are some things to look out for.
1) Watch out for assignment clauses, which state that a change in more than 50 percent of the company's stock ownership must be approved by the landlord. You may find your landlord terminating your lease as your company grows and people invest in the company.
2) Get permission to sublet your office. This way, you can rent out some of the space if you want to downsize and save some money, or if your business does not succeed, you won't be stuck paying for an office you're not using.
3) Limit CPI based rent increases. If your landlord wants to increase your rent with the consumer price index, try to delay the increase for a couple of years, and set a cap on each year's increase.
4) Be careful with permitted use clauses. Try to keep it broad so that your business has room to expand.
5) Try to get rid of personal guarantees. This can be difficult, particularly for a start-up, but personal guarantees put you and your assets at risk.
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