Are you thinking of renting a law office?
This post doesn’t deal with finding an office. It deals with 4 things you need to know about renting your first law office. These terms may very well differ from residential terms that you are used to.
Click below for 4 things you must know:
1. Commercial Terms Differ From Residential Terms
For a whole host of reasons, commercial terms differ significantly from residential terms you may be used to. When I rented my first office, I had no experience with commercial leasing.
Many commercial leases are triple net leases.
The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance.
That’s right in addition to rent and utilities you are paying net taxes, insurance, and common area maintenance charges. So you may very well be paying for things like snow plowing.
2. Commercial Leases Are More Expensive
Commercial property is often more rare than residential property. The rarity drives up prices. You can’t have a large office located in a residential zone.
Get past sticker shock. Understand that your commercial lease is being paid with pre-tax dollars as it will in all likelyhood be fully deductible to you. For example if you have a $1000 a month commercial lease and your effective tax rate is 33% you are paying the equivalent of $666 post tax dollars.
3. Commercial Leases Tend To Be Longer In Duration
In residential leases, a year is the most common term. In commercial leases 3 to 5 year terms and more may be more common in your area. Even longer in some cases. So you may pay a premium for the flexibility of a 1 year lease. Which may be more attractive to you because you are unsure how your business is going to grow.
4. You May Have to Pay For the Build Out
If the office floorplan doesn’t meet your needs, you may have to take possession and then build out your office. This can be negotiable.
At McKeen Law Firm in Glastonbury, CT we are presently looking to lease an office to another attorney. The terms aren’t triple net. The term is for 1 year. The rent is reasonable. The amentities and location are outstanding. Please contact me at (860) 471-8333 if you are interested.
Ryan McKeen is A Connecticut Attorney. He likes helping other attorneys build their practices.