by eclewis | Mar 22, 2012 | Business News
Five Reasons To Have Your Lease Reviewed By A Lawyer
When you first start looking at a commercial lease, you may think it is not that much different that a lease that you signed when renting your first apartment when you were younger. However, a commercial lease usually varies greatly in that much more of the financial burden during the term of the lease is on the commercial tenant than a residential tenant. Here are five reasons you want to have your lease reviewed by a qualified business attorney:
- A business lawyer will review your lease to make sure the terms are in your favor. When you sign a standard lease for an apartment, the term is typically only a year and most repairs are done by the landlord. However, a commercial lease is completely different. In many cases, the lease term is at least five years and will typically include, if you are smart, the right to renew the term for up to 20 or more years. Without review, landlords will typically try to have the tenant pay for all repairs – in some cases even things that last longer than the life of the lease including roofs, sewer lines, and foundations. Even if you are using a tenant representative, a business attorney will review all the terms and offer legal advice about what changes should be made to ensure your interests are protected.
- A small business attorney will let you know which terms you really should negotiate and which terms are less necessary to negotiate. As a small business attorney, I have reviewed numerous leases. Having reviewed leases for a living, I can let you know what areas of the lease are a must for negotiating and which areas you can live with.
- Having a small business lawyer makes you seem more professional. Just like many areas in life, when you are a business owner, many things come down to perception. It makes landlords take you more seriously because if you are willing to invest the time and money to hire an attorney to help you with your lease, you are more likely to take your business seriously.
- A small business attorney will make sure the terms are correct. In addition to making sure the terms are in your favor, a small business attorney will help make sure that everything is correct. Although it may seem like a small thing, making sure the dates are correct and the lease terms are written correctly.
- A business attorney can help you with additional documents and permits needed. In addition to signing a lease, many times businesses need additional documents to open a business including licenses, permits, and forms. An attorney can help you navigate all the documents and permits that you will need to operate in the space you find.
As always, if you have any questions about renting space, please contact me, your Denver business attorney at 720-258-6647.
by eclewis | Mar 15, 2012 | Business News
Many times, as a business attorney I get asked if I know much about leasing space. While like many business lawyers, I can review a lease, like most other business lawyers, I don’t really keep track of the current market prices for each neighborhood in the Denver metro area. However, as a good business attorney, I know who does. Here are some things to consider if you are deciding whether to use a tenant representative or not.
- Do you have time to research the best place for your business? Good tenant representatives will be able to advise you on areas of town where your business can succeed. Because they keep track of real estate for a living, they will know where restaurants are successful, where retail shops flourish, and where shops consistently die.
- Do you know the current rental prices? Good tenant representatives know the current market prices for square footage on spaces throughout the area. They will be able to tell you if a space is going for too high or too low. While you can always research this on your own, it may take more time than you have to do so.
- Can you negotiate with landlords? Some people are born negotiators; some are not. If you are not, then having someone negotiate for you can save you money and headache. Tenant representatives are use to negotiating for space and know what can and cannot be changed easily.
- Are you seeking a very specific type of space? If you are seeking office sharing arrangements, space in a specific type of environment (i.e. renting a booth at a salon), a tenant representative may not be best. However, if you are seeking retail space, restaurant space, or office space, a tenant representative may be able to help.
- Do you want to save time when your attorney reviews your lease? In some cases, having a tenant representative can save time when your attorney reviews your lease. Although a tenant representative cannot provide legal advice, a tenant representative, may be able to spot problems during the initial negotiations.
As always, if you have any questions about renting space, please contact me, your Denver business attorney at 720-258-6647.
by eclewis | Mar 8, 2012 | Business News
The old adage was real estate was always a safe bet. As the markets have shown over the past few years, that isn’t always true. However, if you are looking for commercial space, you may want to consider whether it is better to buy or rent. Here are some things to be thinking about when you make this decision:
- Are you going to be in the same place for a long time? If you foresee yourself being in the same building for a long time, buying a space may make more sense than renting it. However, if you are unsure of how long you are going to be someplace, what size your company is going to grow to, or if the location you have chosen is going to be permanent, then renting may be best.
- Can you get financing? Are you a good credit candidate? If you have poor credit and/or low income, you may not be able to get financing. Without financing, you will have to rent. In addition, you need to be thinking about a down payment. For a commercial loan, you may need up to 40% or more down payment for a commercial space.
- Are you still growing? If you see a lot of growth in your company in the next few years, it may be better to lease until you know how big your company is going to be – especially if you are a service industry that needs desk space for employees. However, if you are a restaurant or other industry that can multiply into more than one space, then growth may require another building so buying may be good.
- Can you sublease? If you find the perfect space but it is too large for now, can you sublease the unused space until you need it? If so, buying may give you the security of owning a space and added income from a sublease.
- Do you have a good business plan? If you are looking to finance, most lenders will require a business plan to show why you should get a loan for commercial space. If you don’t have one, contact me today for references to individuals who can help you with one!
As always, if you have any questions about renting space, please contact me, your Denver business attorney at 720-258-6647.
by eclewis | Mar 1, 2012 | Business News
There are times when businesses tend to seek space – either when they first start out if operating out of the owner’s house just won’t work (think retail, restaurants, and even professionals such attorneys, CPAs, and doctors) or when their current space doesn’t meet their needs (think that home office just doesn’t fit the owner and her new employee, the company’s clients have moved, or the company is downsizing and it just doesn’t fit it current situation). Here are five thing to consider when your business seeks new space:
- Do you really need new space? This may seem like a silly question, but sometimes people get into what their business “should” look like rather than what it “does” look like. Although it would be great to be in the newest, best space, unless you will have the income to justify it, new space may be a luxury you cannot afford.
- Are you going to have to break one lease to get a new one? If you are currently in a lease, it may be expensive to break that lease in order to get new space. Are there ways that you can use the space you have until your lease is up? Can employees telecommute? Can you open up a second location giving you enough space between the two?
- What section of town do you want to be in? Some businesses can be successful anywhere. However, many businesses need to be a specific location to be successful. For example, putting a surf shop in a ski resort may result in very few sales. Knowing where your clients are will help you decide where you need to be. Even if you are a service industry that goes to clients’ locations, you should still consider where they are as mileage can be a huge expense!
- Are there any tax breaks available if you move to certain places? Once you have narrowed down the places that your clients are in, you want to research if there are tax breaks for moving into one section of town verses another. Many times a tenant representative or your accountant can help you figure out where locations with tax breaks are.
- Are you going to be taxed more in different cities or subject to more regulations in one verses another? In many cases, tax rates are not going to be a deciding factor in where you move your business. However, depending on your business type, it may be easier to get licensed in one place rather than another (a reason why you see more “sin” businesses in unincorporated counties rather than cities around the metro area) or tax rates may be less (a reason that Furniture Row asks if you would like to pick up from them rather than have furniture delivered). If you sell big ticket items (such as furniture or electronics), having a lower sales tax rate can be a selling point.
As always, if you have any questions about renting space, please contact me, your Denver business attorney at 720-258-6647.
by eclewis | Feb 23, 2012 | Business News
This month, in addition to scheduling an appointment with your CPA, you should schedule an appointment with your Denver small business lawyer – especially if it has been a while since we have talked. Making sure I am up to date with what is going on in your business can help you feel confident that your business is headed in the right direction. When you schedule an appointment, make sure to bring up the following:
- Your tax and legal entity status. As mentioned a few weeks ago, you have a limited amount of time at the beginning of the year to change your tax status if you are a LLC or corporation. Depending on the amount that you are making, your assets and your liabilities, and the current situation of your company, it may make sense to change the way your company is taxed. If you are operating as a sole-proprietorship or a partnership, it may be time to switch to an LLC or corporation. Come in and talk to me, your Denver business lawyer, about your situation and we can figure out the best tax and legal entity status for you.
- Any changes you plan to make this year financially. Are you planning on buying property for your business? Are you planning on hiring employees? Are you going to be making any large purchases? All of these are things your business attorney should know about.
- If your equipment leases or property leases are higher than market average. If your lease is for a long term, it may be difficult to renegotiate it. However, if your lease is significantly higher than the current market price, it may be time to have it reviewed to see if there are any loopholes in it to get you out or at least renegotiate to a better price.
- Any changes to your advisement team. Are you in need of new CPA? Are you bank fees too high to stomach? Have you decided to hire a marketing person? Make sure to keep me, or your Denver small business attorney, abreast of any changes to your advisement team – especially if they want you to sign long term contracts or high-priced contracts to come aboard.
- Any issues you have this month in your business. As always, you should have a list of issues that your business currently has. It may be something as minor as you have one client you can’t collect $25.00 from to something more major such as if you don’t make $30,000.00 this month you may not be able to make payroll.
by eclewis | Feb 16, 2012 | Business News
You have made it through January and now are settled into the year. It is a great time to make appointments with your advisors to make sure that this time next year, you are still successful! So pick up the phone or write an email and set up appointments with the following:
- Your CPA. This is a no-brainer. Your taxes are due soon so schedule an appointment with your CPA today. Your CPA will help determine what you owe, if there are tax breaks available to you, and should help you plan for next future to limit your tax liability.
- Your investment advisor. If your CPA determines that having a retirement plan is beneficial, meet with your investment advisor to see what options are available for you. There are multiple options available (SEP, SIMPLE, 401k, IRA, etc.) with each option having advantages and disadvantages. You should also ask if there are non-traditional investments that may be wise (think real estate bought by your 401k).
- Your banker. If your CPA determines that refinancing loans is in your future, speak with your banker about options to lower your interest rates. Even if refinancing isn’t in your future, if you haven’t sat down with someone at your bank for a long time (or since you set up your account), there may be changes to your account with all the recent banking issues such as new fees, new monthly charges, or new rules. Depending on the fees and charges, you may need to change account types or change banks.
- Your marketer. February is a great month to set up your marketing plan for the year. Meet with your marketer to see what goals you should have for this year and to set up your budget. Is a new website in your future? How about a new logo? Do you want to do offline marketing such as sending out pens or other items with your logo on it? Start thinking now about where you want your business to be next year this time and five years from now.
- Your mortgage broker or landlord. Depending on your interest rates for you home and/or building housing your business, refinancing when rates are at a all time low may help you save money every month. If you have business property, this may bring down your payments to help you with other things (like marketing above). If you have a landlord, it may be harder to change your lease, but it is something that you many want to look at.
Of course, it may be time to schedule an appointment with me, your Denver small business lawyer. Stay tuned for next week’s blog post where I will talk about things you may need to see me about!
